Which of the following changes is considered a source of cash when preparing a statement of cash flow?
A)An increase in property, plant, and equipment
B)A decrease in accounts payable
C)A decrease in inventories
D)An increase in accounts receivable
E)A decrease in accrued wages

Question

Quizplus · Accepted Answer

A decrease in inventories is considered a source of cash because it implies that the company is selling off its inventory without immediately replenishing it, which generates cash.

Which of the Following Changes Is Considered a Source of Cash