Sources of cash do not include:
A) increases in net income.
B) increases in depreciation.
C) decreases in accounts payable.
D) increases in notes payable.
E) increases in taxes payable.

Question

Quizplus · Accepted Answer

Decreases in accounts payable represent a use of cash, not a source. When a company pays down its accounts payable, it is using cash to pay off its liabilities, which reduces its cash balance. All other options listed are sources of cash. Increases in net income, depreciation, notes payable, and taxes payable all contribute to increasing a company's cash flow.

Sources of Cash Do Not Include