When using a spreadsheet to prepare the statement of cash flows, a decrease in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Question

Quizplus · Accepted Answer

A decrease in accounts payable is actually entered with a credit in the statement of cash flows section and a debit in the balance sheet section. This is because a decrease in accounts payable means that less cash was paid out for expenses, resulting in an increase in cash in the statement of cash flows section, and a reduction in liabilities in the balance sheet section.

When Using a Spreadsheet to Prepare the Statement of Cash