When preparing a statement of cash flows using the indirect method,a decrease in accounts payable is subtracted from net income.

Question

Quizplus · Accepted Answer

A decrease in accounts payable means that less money was owed to creditors than in the previous period. This means that cash payments to creditors were lower than in the previous period, and this decrease in payments is added back to net income in the operating activities section of the cash flow statement.

When Preparing a Statement of Cash Flows Using the Indirect