Cash flow from operating activities is increased by:

Question

Quizplus · Accepted Answer

An increase in accounts payable represents an increase in the amount of money owed to suppliers for goods or services received on credit. Since this represents an increase in the company's liabilities, it is a source of cash and increases cash flow from operating activities.

A) represents a use of cash as an increase in accounts receivable means that the company has not yet received payment for goods or services sold, and is waiting for payment from customers. 
B) represents a use of cash as an increase in inventory means the company has spent cash to purchase more inventory. 
C) does not directly impact cash flow from operating activities as depreciation is a non-cash expense that only impacts net income.

Cash Flow from Operating Activities Is Increased By