Final answer:
In the T-account approach for the statement of cash flows, a Decrease in Accounts Receivable, a Decrease in Inventory, and an Increase in Accrued Liabilities would be associated with the credit side of the Cash T-account, indicating cash inflows or conserved cash. An Increase in Inventory would not be entered on the credit side as it usually indicates a cash outflow.
Step-by-step explanation:
When using the T-account approach to prepare the indirect method of the statement of cash flows, the credit side of the Cash T-account typically reflects increases in cash. Pertaining to the options given, amounts would be entered on the credit side when there is a:
- Decrease in Accounts Receivable: This reflects cash inflow as the company is collecting money from its customers.
- Decrease in Inventory: Normally, this would be associated with selling inventory which results in a cash inflow.
- Increase in Accrued Liabilities: This indicates an increase in obligations that have not been paid yet, which means cash is being conserved and not going out yet.
However, an Increase in Inventory would generally be associated with an amount entered on the debit side of the Cash T-account, since purchasing more inventory typically means cash is going out.