If a Change in Accounts Payable Was Added Back to Net

question 30

True/False

If a change in accounts payable was added back to net income on the statement of cash flows prepared using the indirect method,then the amount owed to suppliers during the period had decreased.

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Definitions:

Payments To Creditors

Money paid out by a business to settle debts owed to suppliers or lenders for goods, services, or loans.

Purchases On Account

Transactions where goods are acquired on credit, with payment to be made at a later date.

Subsidiary Ledger

A detailed ledger that contains account information to support the main general ledger accounts.

Adjustment For Supplies

An accounting entry made to account for the change in the supplies' value over a certain period, ensuring the correct expense is recognized.