Question : Increase in amount of prepaid expenses results in -
Option 1: Increase in cash
Option 2: Decrease in cash
Option 3: No change in case
Option 4: None of the above

Question

Question : Increase in amount of prepaid expenses results in -

Option 1: Increase in cash

Option 2: Decrease in cash

Option 3: No change in case

Option 4: None of the above

Team Careers360 · Accepted Answer

Correct Answer: Decrease in cash

Solution : An increase in prepaid expenses shows that more money is being spent now to cover upcoming expenses. Net cash flows will decline as a result of this.

Hence the correct answer is option 2.

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Question : Increase in amount of prepaid expenses results in - Option 1: Increase in cashOption 2: Decrease in cashOption 3: No change in caseOption 4: None of the above

Related Questions

Question : Increase in amount of prepaid expenses results in - Option 1: No change in cashOption 2: Increase in CashOption 3: Decrease in CashOption 4: None of the above

Question : Cash flow arises when the net effect of a transaction_________the amount of cash and cash equivalents - Option 1: Either increase or decreaseOption 2: Only IncreaseOption 3: Only decreaseOption 4: None of the above

Question : Increase in prepaid insurance by Rs. 2,000 , will increase, decrease or have no effect on cash flow from operating activities while preparing 'Cash Flow Statement':Option 1: IncreaseOption 2: DecreaseOption 3: No effectOption 4: None of the above

Question : Increase in prepaid insurance by Rs. 2,000 , will increase, decrease or have no effect on cash flow from operating activities while preparing 'Cash Flow Statement':Option 1: IncreaseOption 2: DecreaseOption 3: No effectOption 4: None of the above

Question : Decrease in outstanding employees benefits expenses by Rs.3,000, will increase, decrease or have no effect on cash flow from operating activities while preparing 'Cash Flow Statement':Option 1: IncreaseOption 2: DecreaseOption 3: No effectOption 4: None of the above

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Question : Increase in amount of prepaid expenses results in -
Option 1: Increase in cash
Option 2: Decrease in cash
Option 3: No change in case
Option 4: None of the above

Question : Increase in amount of prepaid expenses results in -
Option 1: No change in cash
Option 2: Increase in Cash
Option 3: Decrease in Cash
Option 4: None of the above

Question : Cash flow arises when the net effect of a transaction_________the amount of cash and cash equivalents -
Option 1: Either increase or decrease
Option 2: Only Increase
Option 3: Only decrease
Option 4: None of the above

Question : Increase in prepaid insurance by Rs. 2,000 , will increase, decrease or have no effect on cash flow from operating activities while preparing 'Cash Flow Statement':
Option 1: Increase
Option 2: Decrease
Option 3: No effect
Option 4: None of the above

Question : Increase in prepaid insurance by Rs. 2,000 , will increase, decrease or have no effect on cash flow from operating activities while preparing 'Cash Flow Statement':
Option 1: Increase
Option 2: Decrease
Option 3: No effect
Option 4: None of the above

Question : Decrease in outstanding employees benefits expenses by Rs.3,000, will increase, decrease or have no effect on cash flow from operating activities while preparing 'Cash Flow Statement':
Option 1: Increase
Option 2: Decrease
Option 3: No effect
Option 4: None of the above