Asked by ashley alvarez on Jun 13, 2024
Verified
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
Accounts Payable Balance
The total amount a company owes to its suppliers or creditors for goods or services received but not yet paid for.
Operating Activities
Transactions and other events that are not investing or financing activities which affect the operational inflows and outflows of cash.
- Understand the impact of changes in current asset and current liability accounts on cash flows.
Verified Answer
AP
Andri PreimaJun 18, 2024
Final Answer :
B
Explanation :
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.
Learning Objectives
- Understand the impact of changes in current asset and current liability accounts on cash flows.