Asked by Evlyn Torgerson on Jun 18, 2024

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If accounts payable have increased during a period,

A) revenues on an accrual basis are less than revenues on a cash basis
B) expenses on an accrual basis are less than expenses on a cash basis
C) expenses on an accrual basis are the same as expenses on a cash basis
D) expenses on an accrual basis are greater than expenses on a cash basis

Accounts Payable

The amount owed by a business to its suppliers or vendors for goods and services purchased on credit.

Accrual Basis

An accounting method that records income and expenses when they are earned or incurred, regardless of when cash is exchanged.

Expenses

Costs incurred by a business or individual in the course of generating revenue, including operational costs and overheads.

  • Estimate the net cash proceeds or payments in operational activities via the indirect technique.
  • Gain insight into the effects of changes in current assets and liabilities on the cash flows derived from operating activities.
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RC
Riley CabaneroJun 21, 2024
Final Answer :
D
Explanation :
An increase in accounts payable means that more expenses were recorded on an accrual basis than were actually paid in cash during the period. Therefore, expenses on an accrual basis are greater than expenses on a cash basis.