Nelson Corp.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet:

The change in Accounts Payable is as a negative cash flow in the adjustments to net income.

Question

Nelson Corp.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet:
  
The change in Accounts Payable is as a negative cash flow in the adjustments to net income.

Quizplus · Accepted Answer

A decrease in Accounts Payable represents an increase in cash outflow, which is reflected as a negative adjustment to net income in the indirect method of preparing the statement of cash flows.