Cost of goods sold,plus increase in inventory,plus the decrease in accounts payable equals the cash paid to suppliers of inventory.

Question

Quizplus · Accepted Answer

The equation is a variation of the accounting equation: Assets = Liabilities + Equity. In this case, the assets are inventory and accounts payable, the liabilities are the cash paid to suppliers, and the equity is the cost of goods sold.

Cost of Goods Sold,plus Increase in Inventory,plus the Decrease in Accounts