Forsythe Company had a $30,000 increase in accounts payable from the prior period.If a worksheet is used to facilitate the preparation of the statement of cash flows, the entry in the reconciling columns of the worksheet would be
A)Operating- Increase in Accounts Payable (debit column), Accounts Payable (credit column).
B)Accounts Payable (debit column), Cash (credit column).
C)Accounts Payable (debit column) Operating- Increase in Accounts Payable (credit column).
D)Cash (debit column), Accounts Payable (credit column).

Question

Quizplus · Accepted Answer

The increase in accounts payable represents an increase in the company's liabilities, which is a source of cash. Therefore, the entry in the reconciling columns of the worksheet would be a debit to Operating- Increase in Accounts Payable (to increase the company's liabilities) and a credit to Accounts Payable (to increase the company's accounts payable).

Forsythe Company Had a $30,000 Increase in Accounts Payable from the Prior