To determine cash payments for merchandise for the cash flow statement using the direct method, a decrease in accounts payable is added to the cost of merchandise sold.

Question

Quizplus · Accepted Answer

When using the direct method to determine cash payments for merchandise for the cash flow statement, a decrease in accounts payable is added to the cost of merchandise sold because it represents a cash outflow that is not reflected in the cost of merchandise sold.

To Determine Cash Payments for Merchandise for the Cash Flow