Changes in trade payables and accrued liabilities affect cash flows from operating activities.

Question

Quizplus · Accepted Answer

Changes in trade payables and accrued liabilities affect the cash flows from operating activities, as they represent cash payments that will need to be made in the future. An increase in trade payables or accrued liabilities indicates that more cash will be paid out in the future, thus reducing cash flows from operating activities. Conversely, a decrease in trade payables or accrued liabilities indicates that less cash will be paid out in the future, thus increasing cash flows from operating activities.

Changes in Trade Payables and Accrued Liabilities Affect Cash Flows