When a Company Increases Trade Payables from One Year to the Next

question 86

Multiple Choice

When a company increases trade payables from one year to the next, what is the effect on cash flows?

• A) A decrease in cash caused by paying down our debt to vendors.
• B) An increase in cash because we have not paid cash for all the inventory and services purchased on credit during the period.
• C) A decrease to cash because we will have to pay these liabilities in the future.
• D) An increase to cash because we have received cash from vendors.

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