Which of the Following Statements Is CORRECT

question 61

Multiple Choice

Which of the following statements is CORRECT?

• A) In the statement of cash flows, a decrease in accounts receivable is reported as a use of cash.
• B) Dividends do not show up in the statement of cash flows because dividends are considered to be a financing activity, not an operating activity.
• C) In the statement of cash flows, a decrease in accounts payable is reported as a use of cash.
• D) In the statement of cash flows, depreciation charges are reported as a use of cash.
• E) In the statement of cash flows, a decrease in inventories is reported as a use of cash.

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Definitions:

Obligor

A person or entity legally bound to provide a payment, service, or other benefit to another, known as the obligee.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Pine

A type of evergreen tree with needle-like leaves, known for its wood and resin.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to harmonize the law in sales and other commercial transactions across states.