How Many of the Following Items Decrease Cash Flow in the Statement

question 15

Multiple Choice

How many of the following items decrease cash flow in the statement of cash flows? • Increase in accounts receivable
• Increase in notes payable
• Depreciation expense
• Increase in investments
• Decrease in accounts payable
• Decrease in prepaid expenses
• Dividend payment
• Increase in accrued expenses

• A) Two of these items decrease cash flow
• B) Three of these items decrease cash flow
• C) Four of these items decrease cash flow
• D) Five of these items decrease cash flow

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Definitions:

Production Possibility Frontier

The production possibility frontier is a curve illustrating the maximum feasible amounts of two commodities that a business can produce with its available resources and technology.

Scarce Resources

Natural or human assets available in limited quantities relative to their demand, leading to the necessity of economic allocation.

Capital Goods

Long-lasting goods acquired by businesses to produce goods or services, encompassing items like machinery, tools, and buildings.

Consumer Goods

Products that are purchased and used by individuals for personal or household consumption.