All else equal, if a firm reduces its accounts payable by $20,000 during the year,

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Reducing accounts payable means that the firm paid off some of its obligations to suppliers. This results in a decrease in cash flow from operating activities because it represents an outflow of cash used to pay off the liabilities. Accounts payable are part of the operating activities section of the cash flow statement, as they represent a change in the company's working capital. If a firm reduces its accounts payable by $20,000 during the year, it means that it has paid off some of its debts to suppliers. This reduces the amount of cash outflows from operating activities, as less money is going towards paying these debts. Therefore, cash flow from operating activities will decrease by $20,000.

All Else Equal, If a Firm Reduces Its Accounts Payable