If accounts payable decreases during an accounting period, then the cash paid for merchandise purchased is less than the merchandise purchases for the period.

Question

Quizplus · Accepted Answer

If accounts payable decreases, it indicates that the company has paid off more of its outstanding debts than it has incurred in new debts for the period, suggesting that cash paid for merchandise is more than the purchases made on credit.

If Accounts Payable Decreases During an Accounting Period, Then the Cash