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Basic Question 3 of 8
Which of the following would represent an inflow of cash in determining cash flow from operating activities using the direct method?
B. An increase in inventory
C. A decrease in accounts payable
D. Depreciation
A. A decrease in accounts receivable
B. An increase in inventory
C. A decrease in accounts payable
D. Depreciation
User Contributed Comments 4
| User | Comment |
|---|---|
| choas69 | add: decrease in CA less: increase in CA add: increase in CL less: decrease in CL |
| choas69 | CA inverse relationship CL direct relationship |
| mlaique | Why not depreciation? |
| lndcobra | I would argue none, as a decrease in accounts receivable could mean writing off a loss, therefore, no cash transaction! But out of the 4, it is the only "inflow" |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data
CFA® 2025 Level I Curriculum, Volume 2, Module 4.