The Accounts Payable Balance Has Decreased During the Year

question 68

Multiple Choice

The Accounts Payable balance has decreased during the year.How would this event affect the statement of cash flows operations section-indirect method?

• A)It is already included in the net income.
• B)It would affect the operations section positively.
• C)It would affect the operations section negatively.
• D)Does not affect the cash flow from operations.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Bank Charges Expense

Costs incurred by an account holder for the bank's services, such as account maintenance fees, non-sufficient funds (NSF) fees, or transaction fees.

NSF

An abbreviation for "Non-Sufficient Funds," indicating that a cheque could not be honored due to insufficient funds in the account.