During the current year, the accounts payable balance decreased.
A)This decrease indicates that payments on account were less during the period than credit purchases.
B)This decrease is added to net income in the operating activities section of a statement of cash flows prepared under the direct method.
C)This decrease is deducted from net income in the operating activities section of a statement of cash flows prepared under the direct method.
D)This decrease indicates that payments on account exceeded credit purchases during the period.

Question

Quizplus · Accepted Answer

A decrease in accounts payable suggests that the company paid off more of its accounts payable than it incurred in new payables, indicating that payments on account exceeded credit purchases.

During the Current Year, the Accounts Payable Balance Decreased