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20 May, 13:17

Which of the following illustrates an inflow of cash? a. a decrease in common stock b. a decrease in long-term debt c. a decrease in inventory d. an increase in fixed assets

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  1. 20 May, 13:33
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    The answer is C.

    Explanation:

    A decrease in inventory means customers are buying inventories (goods) from the business. It is an inflow because money comes in.

    Option A is incorrect because a decrease in common stock means shareholders are withdrawing their shareholding from the business and the business will pay them. This is an outflow.

    Option B is incorrect because a decrease in long term debt means the business is paying its debt or redcuing its liability and this is an outflow.

    Option D is also incorrect because an increase in fixed assets means the business is buying this asset with cash and this is an outflow
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