We add an increase in interest payable to interest expense in arriving at cash paid for interest under the direct method.We deduct an increase in interest payable from interest expense in arriving at cash paid for interest under the direct method.

Question

Quizplus · Accepted Answer

Under the direct method, an increase in interest payable would be added to interest expense to arrive at the cash paid for interest, not deducted.

We Add an Increase in Interest Payable to Interest Expense