Decreases in current assets other than cash have positive effects on cash flows and increases in current assets have negative effects on cash flows.

Question

Quizplus · Accepted Answer

Decreases in current assets other than cash (like inventory or accounts receivable) indicate that these assets are being converted into cash, thus increasing cash flow. Conversely, increases in current assets suggest that cash is being used to acquire these assets, reducing cash flow.

Decreases in Current Assets Other Than Cash Have Positive Effects