During the Year, the Train Stop Decreased Its Accounts Receivable

question 281

Multiple Choice

During the year, The Train Stop decreased its accounts receivable by $60, increased its inventory by $130, and decreased its accounts payable by $20. For these three accounts, the firm has a net:

• A) $90 use of cash.
• B) $50 use of cash.
• C) $170 use of cash.
• D) $90 source of cash.
• E) $50 source of cash.

---

Definitions:

Purchase Supplies

The act of acquiring materials and consumable items required for the production process or office use.

Assets

Resources owned by a company that are expected to provide future economic benefits.

Investing Activity

Financial activities related to acquiring or disposing of non-current assets, such as property, plant, and equipment, which are recorded on a company's cash flow statement.

Cash Dividends

Dividends paid by a company to its shareholders in the form of cash.