What Is the Impact on the Cash Flow Statement from a Decrease

question 171

Multiple Choice

What is the impact on the cash flow statement from a decrease in accounts receivable, assuming the indirect method is used?

• A) A decrease in the cash flow from operating activities
• B) An increase in the cash flow from operating activities
• C) An increase in the cash flow from financing activities
• D) None.A decrease in accounts receivable has an impact only if the direct method is used

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Definitions:

Outsource

The practice of contracting work out to an external organization rather than performing it in-house.

Information

Data that has been processed in such a way that it can be used to inform decisions, strategies, and actions.

Supply Chain

A composite of enterprises, participants, procedures, information, and instruments implicated in the conveyance of a product or service from the vendor to the patron.

Lost Sales

Potential sales that cannot be realized due to stockouts, inadequate inventory, or other operational issues.