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During 2012, the Accounts Payable Balance of Bombay Corporation Decreased

Question 40

Multiple Choice

During 2012, the accounts payable balance of Bombay Corporation decreased. From the statement of cash flows the financial reader would most likely conclude which of the following?


A) This decrease indicates that Bombay's sales increased compared to the previous period.
B) This decrease is added to net income in the operating activities section of a statement of cash flows prepared under the indirect method.
C) This decrease is deducted from the investing activities section of a statement of cash flows prepared under the indirect method.
D) This decrease indicates that Bombay paid more during the period than it recognized as credit purchases.

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