To determine cash payments for operating expenses for the statement of cash flows using the direct method, a decrease in accrued expenses is added to operating expenses payable other than depreciation.

Question

Quizplus · Accepted Answer

A decrease in accrued expenses represents cash payments made for expenses that were previously recognized but unpaid, and thus should be added to operating expenses payable other than depreciation when using the direct method to prepare the statement of cash flows.

To Determine Cash Payments for Operating Expenses for the Statement