Cash paid to suppliers can be derived by adjusting costs of goods sold for changes in inventory.

Inventory

The raw materials, work-in-progress products, and finished goods that a company holds for the purpose of sale in the near future.

Costs Of Goods Sold

Direct costs attributable to the production of the goods sold by a company, including materials and labor.

Discern between the direct and indirect methods utilized in reporting cash flows from operating activities.
Grasp the effects of adjustments in balance sheet accounts on cash flows and their representation in the cash flow statement.

Verified Answer

Apr 30, 2024

Final Answer :

False

Explanation :

An adjustment for changes in accounts payable is also required.

Learning Objectives

Discern between the direct and indirect methods utilized in reporting cash flows from operating activities.
Grasp the effects of adjustments in balance sheet accounts on cash flows and their representation in the cash flow statement.