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Calculations with cash flow from operating activities

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4.7 Indicate whether each of the following items would result in net cash flow from operating activities being higher (H) or lower (L) than net income.
(A) Decrease in accounts payable.
(B) Depreciation expense.
(C) Decrease in Inventory.
(D) Gain on sale of assets.
(E) Increase in accounts receivable.
(F) Increase in deferred tax liabilities.
(G) Decrease in accrued liabilities.
(H) Increase in prepaid expenses.
(I) Increase in deferred revenue.
(J) Decrease in interest receivable.

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This posting helps with cash flow from operating activities. This solution helps indicate whether various items would result in net cash flow from operating activities being higher or lower than net income.

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Dear student,
Solution is provided in a separate word document attached .All answers are given with symbols (H) and (L) and in addition explanatory notes are provided where necessary.

Answer:
(A) Decrease in accounts payable. (L)
Note: It will be deducted from Net income being cash payment to A/P

(B) Depreciation expense. (H)
Note: Depreciation is a non cash item but ...

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