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.LO1

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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