If accounts payable increase during an accounting period, then the cash paid for merchandise purchased is less than the merchandise purchases for the period.

Question

Quizplus · Accepted Answer

When accounts payable increase, it means that the company has purchased merchandise on credit and has not yet paid for these purchases in cash, resulting in the cash paid being less than the total merchandise purchases for the period.

If Accounts Payable Increase During an Accounting Period, Then the Cash