Under the indirect method,a decrease in accounts payable is added to net income to arrive at net cash flows from operating activities.

Question

Quizplus · Accepted Answer

Under the indirect method, a decrease in accounts payable is treated as a source of cash and is therefore added to net income to arrive at net cash flows from operating activities. Alternatively, an increase in accounts payable is treated as a use of cash and is therefore subtracted from net income to arrive at net cash flows from operating activities.

Under the Indirect Method,a Decrease in Accounts Payable Is Added