Under the direct method, calculating cash paid for merchandise includes ________.
A) adding an increase in Accounts Payable
B) subtracting an increase in Accounts Payable
C) adding a decrease in Inventory
D) subtracting an increase in Inventory

Question

Quizplus · Accepted Answer

Under the direct method, an increase in Accounts Payable is subtracted from purchases to calculate cash paid for merchandise, as it represents purchases not yet paid in cash.

Under the Direct Method, Calculating Cash Paid for Merchandise Includes