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Increase in accounts payable Increase in accruals Decrease in accounts receivable Increase in Inventory Increase in...

Increase in accounts payable

Increase in accruals

Decrease in accounts receivable

Increase in Inventory Increase in Property, Plant and Equipment

Decrease in Long-term Debt

Increase in Net Income

A. Use of Cash

B. Source of Cash

Solutions

Expert Solution

1. Increase in accounts payable = It is a source of cash. Increase in accounts payable means we have borrowed something for which our payable liabilities have increased as of now. Later on when the payables will be paid, it will be use of cash.

2. Increase in accruals: It is a use of cash. Increase in accruals means we have increased our outstanding receivables for which we have made the payments. These will be received in future. When we will receive them, they will be our source of cash.

3.Decrease in accounts receivables: It is a source of cash. Decrease in accounts receivables means we have received cash out of accounts receivables from our debtors. And now the receivables balance is decreased.

4. Increase in inventory : It is a use of cash. Increase in inventory means we have purchased some inventory. When inventory is purchased, it reduces cash from where it has been purchased.

5. Increase in property, plant and equipment: It is a use of cash. Increase in property plant and equipment means we have purchased some property plant and equipment. When property plant and equipment is purchased,it reduces cash from where it has been purchased.

6. Decrease in long term debt: It is a use of cash. Decrease in long term debt means we have paid out some amount of long term debt, so it has been decreased. So, it is a use of cash.

7. Increase in net income: Increase in net income is source of cash. Net income increase will result in more revenues / cash coming in.

jeff jeffy answered 1 year ago
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