A Company Reported an Increase in Accounts Payable and a Decrease

question 101

Multiple Choice

A company reported an increase in accounts payable and a decrease in inventory during 2016. Which of the following statements is correct?

• A)Cash paid to suppliers equals cost of goods sold plus both the increase in accounts payable and the decrease in inventory.
• B)Cash paid to suppliers equals cost of goods sold minus both the increase in accounts payable and the decrease in inventory.
• C)Cash paid to suppliers equals cost of goods sold minus the increase in accounts payable, plus the decrease in inventory.
• D)Cash paid to suppliers equals cost of goods sold plus the increase in accounts payable, minus the decrease in inventory.

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Definitions:

Negative Connotation

A term or phrase that evokes undesirable, adverse, or unfavorable feelings or associations.

Contingent

Depending on something else that might or might not happen, often used to describe work or benefits that are not guaranteed but based on certain conditions.

Centralize Power

The act of concentrating authority and decision-making capabilities within a small group or at the top level of an organization.

National Culture

The set of shared values, beliefs, customs, practices, and social behaviors that characterize the people of a nation.