Which of the following would be considered a "source" of cash for purposes of constructing a statement of cash flows?

Multiple Choice

Dividends paid to the company's own shareholders.

Increase in prepaid expenses

Decrease in accounts payable

Increase in accrued lists.

Expert Solution

Option (d) - Increase in accrued liabilities

Analysis is as follows:

Accrued liabilities amount has increased while comparing the same with the value at the beginning of the period. By this we can analyse that the liability to pay has increased because the additional cash/fund has been taken from the respective party and agreed to pay later at determined date. As a result there is an inflow of cash (source of cash) to the entity.

ekkarill92 answered 2 years ago

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