A Company Uses the Direct Method to Prepare the Statement

A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements: *Relates solely to the acquisition of inventory
What will appear in the operating activities section related to accounts payable?

A) The increase of $18,000 will be subtracted from net income.
B) The increase of $18,000 will be added to net income.
C) The increase of $18,000 will be added to purchases to determine payments to suppliers.
D) The increase of $18,000 will be subtracted from purchases to determine payments to suppliers.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free