During 2017,the accounts payable balance of Andreas Corp.decreased.Which of the following statements is true?
A)This decrease indicates that Andreas paid less during the period than it recognized as expenses on the income statement.
B)This decrease is added to net income in the Operating Activities section of a statement of cash flows prepared under the indirect method.
C)This decrease is deducted from net income in the Operating Activities section of a statement of cash flows prepared under the indirect method.
D)This decrease is considered only when the Operating Activities section of a statement of cash flows is prepared under the direct method.

Question

Quizplus · Accepted Answer

A decrease in accounts payable indicates that the company paid off more of its liabilities than it incurred, which means cash was used. Under the indirect method, this decrease is deducted from net income in the Operating Activities section.

During 2017,the Accounts Payable Balance of Andreas Corp