The correct answer is A. A decrease in inventory.
Inventory is a current asset that represents the goods and materials that a company has on hand for sale or use in production. When a company decreases its inventory, it has less money tied up in its assets, which can lead to an increase in cash flow.
Debtors are a company’s accounts receivable, which are the amounts that customers owe the company for goods or services that have been sold. When a company increases its debtors, it is extending credit to its customers, which can lead to an increase in accounts receivable and a decrease in cash flow.
Prepaid expenses are expenses that have been paid in advance, but have not yet been incurred. When a company increases its prepaid expenses, it is essentially borrowing money from itself, which can lead to an increase in cash flow.
Income in advance is income that has been received in advance, but has not yet been earned. When a company decreases its income in advance, it is essentially returning money to its customers, which can lead to a decrease in cash flow.
In conclusion, the correct answer is A. A decrease in inventory.