When using the indirect method to determine operating cash flows,how is the decrease in accounts payable shown on the Statement of Cash Flows?
A)Operating activity
B)Investing activity
C)Financing activity
D)Noncash investing and financing activity
E)Not reported on the statement of cash flows

Question

Quizplus · Accepted Answer

The decrease in accounts payable is shown as an operating activity on the statement of cash flows because it is a change in a current liability account that is directly related to the company's operations. Specifically, a decrease in accounts payable means that the company paid off some of its expenses that were previously recorded as accounts payable, which is considered a use of cash in operating activities.

When Using the Indirect Method to Determine Operating Cash Flows,how