If,on the comparative balance sheet,Accounts Payable has increased,the amount of increase would be:
A)added to net income on the statement of cash flows (indirect method).
B)subtracted from net income on the statement of cash flows (indirect method).
C)ignored because cash is not involved.
D)None of these answers is correct.

Question

Quizplus · Accepted Answer

An increase in Accounts Payable indicates that expenses have been incurred but not yet paid in cash, which means cash was conserved. Therefore, it is added back to net income in the operating activities section of the cash flow statement when using the indirect method.

If,on the Comparative Balance Sheet,Accounts Payable Has Increased,the Amount of Increase