A company uses the indirect method to prepare the statement of cash flows.How will the adjustment to reflect the amount of cash payments to suppliers be presented on the statement?

Question

Quizplus · Accepted Answer

The adjustment to reflect the amount of cash payments to suppliers will be for the increase or decrease in accounts payable for the period and will adjust net income in the operating activities section. This is because the change in accounts payable affects the company's cash flows from operating activities, as it represents cash payments made during the period to suppliers.

A Company Uses the Indirect Method to Prepare the Statement