Which of the following statements is CORRECT Select one a In

Which of the following statements is CORRECT? Select one: a. In the statement of cash flows, depreciation charges are reported as a use of cash. b. In the statement of cash flows, a decrease in inventories is reported as a use of cash. c. In the statement of cash flows, a decrease in accounts receivable is reported as a use of cash. d. Dividends do not show up in the statement of cash flows because dividends are considered to be a financing activity, not an operating activity. e. In the statement of cash flows, a decrease in accounts payable is reported as a use of cash.

Solution

Answer is e. In the statement of cash flows, a decrease in accounts payable is reported as a use of cash.

Explanation:

The Accounts payable decrease from beginning higher amount to ending lower amount means the amount of accounts payable has been paid off during the year and thus will be shown as cash outflows during the year.