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

question 76

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)A decrease in accounts receivable has an impact only if the direct method is used

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Definitions:

Company Stock

Shares of ownership in a corporation, representing a claim on the company's earnings and assets.

Incremental Value

The additional value generated by taking a specific action, such as implementing a project, over the base case without taking the action.

Equity-Financed

Describes projects or purchases funded through the issuance of equity or shares, rather than debt.

Incremental Value

The additional or extra value generated by undertaking a new project or action, calculated as the difference in total value with and without the project.