A decrease in inventory
An increase in debtors
An increase in the prepaid expenses
A decrease in income in advance
Answer is Right!
Answer is Wrong!
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
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