Which one of these does not affect the cash flow to creditors?
A)Interest paid on long-term debt
B)New mortgage on a building
C)Increase in accounts payable
D)Mortgage interest payment
E)Reduction in long-term debt

Question

Quizplus · Accepted Answer

Increase in accounts payable does not affect the cash flow to creditors because it represents an increase in the amount owed to creditors, but it does not result in an actual outflow of cash at the time of the increase. This is because accounts payable refers to the amount owed for purchases made on credit, which will be paid at a later date. On the other hand, options A, B, D, and E all have an impact on cash flow to creditors, as they involve either payments of interest or changes in the amount of debt owed to creditors.

Which One of These Does Not Affect the Cash Flow