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

Question

Quizplus · Accepted Answer

Trade payables and accrued liabilities are both components of the operating activities section of a company's cash flow statement. An increase in trade payables represents an increase in the amounts owed to suppliers for goods and services received, which is a source of cash, while an increase in accrued liabilities represents an increase in expenses owed but not yet paid, which is also a source of cash. Conversely, a decrease in trade payables or accrued liabilities represents a use of cash.

Changes in Trade Payables and Accrued Liabilities Affect Cash ﬂOws