In calculating cash flows from operating activities using the indirect method, an increase in accounts payable is
A) added to net income.
B) deducted from net income.
C) ignored because it does not affect cash.
D) not reported on a statement of cash flows.

Question

Quizplus · Accepted Answer

An increase in accounts payable indicates that a company has incurred expenses for which it has not yet paid cash. In the indirect method of calculating cash flows from operating activities, this increase is added to net income because it represents cash that has not left the company.

In Calculating Cash Flows from Operating Activities Using the Indirect