When accounts payable increase during a period, cost of goods sold on an accrual basis is lower than cost of goods sold on a cash basis.

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An increase in accounts payable indicates that expenses have been incurred but not yet paid, which means that on an accrual basis, expenses (and thus COGS) are recognized when incurred, not when paid, making accrual COGS higher than cash COGS.

When Accounts Payable Increase During a Period, Cost of Goods