indirect method if cash increases use the word source if cash decreases use the word 593986

Aug 29, 2021 | Uncategorized

The following lists current asset and current liability accounts. Identify each account as a current asset (CA) or a current liability (CL) account. After classifying each account, determine how the change in the account balance is treated in the conversion of accrual net income to the cash basis, indirect method. If cash increases, use the word source; if cash decreases, use the word use.

Account Title

CA or CL

Increase

or Decrease

Credit card receivables

–

–

–

Accounts payable

–

–

–

Inventory (for resale)

–

–

–

Accounts receivable

–

–

–

Prepaid expenses

–

–

–

Accrued payroll payable

–

–

–

Interest payable

–

–

–

Marketable securities

–

–

–