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A) Accounts Receivables B) Inventories C) Change in note payable
yes A is the right answer
A) A decrease in accounts receivables means we have collected some amounts, so this will lead to cash-in, apart net income.
B) any decrease in inventories means there are sales transactions happend this will result in net income.
whether shall recognize normal or upnormal spoilage this is also will result in cost of goods sold
C) change in notes payable realted to getting a loan or purchase on account , decrease or increase in this will not affect in net income.
Decrease in accounts receivable will provide funds as decrease in accounts receivable results in cash inflow.. We book this under the heads cash received from operating activity in cash flow..
A) Accounts Receivables - Cash inflow from debtors
(a) is correct. Remember the college accounting rule. Any increase in assets is a use of cash and vice versa. So if A/R goes down that's a source of cash.
