Operating Activities: Indirect Method Video Lessons

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Problem: When a company increases accounts payable from one year to the next, the effect on cash flows A) is a decrease in cash caused by paying down our debt to vendors. B) is an increase in cash because we have not paid cash for all the inventory and services purchased on credit during the period. C) is a decrease to cash because we will have to pay these liabilities in the future. D) is an increase to cash because we have received cash from vendors.

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Problem Details

When a company increases accounts payable from one year to the next, the effect on cash flows

A) is a decrease in cash caused by paying down our debt to vendors.

B) is an increase in cash because we have not paid cash for all the inventory and services purchased on credit during the period.

C) is a decrease to cash because we will have to pay these liabilities in the future.

D) is an increase to cash because we have received cash from vendors.

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What scientific concept do you need to know in order to solve this problem?

Our tutors have indicated that to solve this problem you will need to apply the Operating Activities: Indirect Method concept. You can view video lessons to learn Operating Activities: Indirect Method. Or if you need more Operating Activities: Indirect Method practice, you can also practice Operating Activities: Indirect Method practice problems.

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