Which of the following is not the application of cash?
An increase in bills payable is not the application of cash.
Application of cash are:-
(i) Purchase of fired assets Cash may be utilized for additional fixed assets or renewals or replacement of existing fixed assets.
(ii) Payment of long-term loans The payment of long-term loans such as loans from financial institutions or debentures results in a decrease in cash. It is, therefore, an application of cash.
(iii) Decrease in deferred payment liabilities Payments for plant and machinery purchased on a deferred payment basis has to be made as per the agreement. It is, therefore, an application of cash.
(IV) Loss on account of operations Loss suffered on account of business operations will result in an outflow of cash.
(V) Payment of tax will result in a decrease in cash and hence it is an application of cash.
(vi) Payment of dividend This decreases the cash available for business and hence it is an application of cash.
(Vii) Decrease in unsecured loans, deposits, etc. The decrease in these liabilities denotes that they have been paid off to that extent. It results, therefore, in the outflow of cash.