If,on the comparative balance sheet,Accounts Payable has decreased,the amount of decrease would be:
A)added to net income on the statement of cash flows.
B)subtracted from net income on the statement of cash flows.
C)ignored because cash is not involved.
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

Accounts Payable represents an amount owed to suppliers for goods and services received on credit. When Accounts Payable decreases on the comparative balance sheet, it means that the company has paid off some of its debt to suppliers. This is a use of cash, which should be subtracted from net income on the statement of cash flows.

If,on the Comparative Balance Sheet,Accounts Payable Has Decreased,the Amount of Decrease