The Accounts Payable balance has decreased during the year.How would this event affect the statement of cash flows operations section-indirect method?
A)It is already included in the net income.
B)It would affect the operations section positively.
C)It would affect the operations section negatively.
D)Does not affect the cash flow from operations.

Question

Quizplus · Accepted Answer

A decrease in Accounts Payable indicates that the company has paid off some of its liabilities, which means cash has been used. In the indirect method, this would be reflected as a negative adjustment to net income in the operations section of the cash flow statement.

The Accounts Payable Balance Has Decreased During the Year