[amp_mcq option1=”decrease in cash” option2=”increase in cash” option3=”no changes in cash” option4=”None of these” correct=”option1″]
The correct answer is: A. decrease in cash.
An increase in the amount of creditors means that a company owes more money to its suppliers. This will lead to a decrease in cash, as the company will need to use its cash to pay off its debts.
Option B is incorrect because an increase in creditors would lead to a decrease in cash, not an increase.
Option C is incorrect because an increase in creditors would lead to a decrease in cash, not no change.
Option D is incorrect because an increase in creditors would lead to a decrease in cash, not none of these.