In: Finance
Which one of the following is a source of cash?
A. increase in accounts receivable
B. decrease in notes payable
C. decrease in common stock
D. increase in accounts payable
E. increase in inventory
Answer: Increase in accounts payable
Increase in accounts payable implies company is purchasing products or services on credit and hence is not paying cash. SO it is a source of cash.
All other options either require use of cash like retirement of notes payable, common stock redemption, increase in inventory or increase in accounts receivables.