For each of the following activities that may take place during the accounting period, indicate the effect (a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-Decrease in accounts payable balance
A)Increase cash from operating activities
B)Decrease cash from operating activities
C)Increase cash from investing activities
D)Decrease cash from investing activities
E)Increase cash from financing activities
F)Decrease cash from financing activities
G)Noncash investing and financing supplement

Question

Quizplus · Accepted Answer

A decrease in accounts payable indicates that a company has paid off some of its debts or bills, which means cash has been used. In the indirect method of preparing the statement of cash flows, this is reflected as a decrease in cash from operating activities because accounts payable is related to the company's day-to-day operations.

For Each of the Following Activities That May Take Place