A Company Uses the Direct Method to Prepare the Statement

A company uses the direct method to prepare the statement of cash flows. How will the amount of cash payments to suppliers be computed?

A) The amount of cash payments to suppliers is computed as interest expense minus the decrease in accounts payable.
B) The amount of cash payments to suppliers is computed as interest expense minus the decrease in merchandise inventory.
C) The amount of cash payments to suppliers is computed as purchases minus the increase in accounts payable.
D) The amount of cash payments to suppliers is computed as interest expense minus the increase in merchandise inventory.

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