An increase in accounts payable is _____ while calculating cash flows from operating activities using indirect method.
A) added to net income
B) deducted from gross income
C) added to earnings before tax
D) deducted from depreciation expense

Question

Quizplus · Accepted Answer

An increase in accounts payable indicates an increase in the amount owed to suppliers or vendors for goods or services received on credit. This increase in liability is not a cash outflow and is added back to the net income while calculating cash flows from operating activities using the indirect method.

An Increase in Accounts Payable Is _____ While Calculating Cash