Determining Cash Flow Effects
For each of the following transactions, determine whether cash flows from operating activities will increase, decrease, or remain the same:
a. Purchased merchandise on credit.
b. Paid an account payable in cash.
c. Accrued payroll for the month but did not pay it.
d. Borrowed money from the bank. The term of the note is 90 days
e. Reclassified a long-term note as a current liability.
f. Paid accrued interest expense.
g. Disclosed a contingent liability based on a pending lawsuit.
h. Paid back the bank for money borrowed in d. Ignore interest.
i. Collected cash from a customer for services that will be performed in the next accounting period (i.e., deferred revenues are recorded).
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