Asked by Quitta Moore on Jun 01, 2024
Verified
If accounts payable have increased during a period,
A) revenues on an accrual basis are less than revenues on a cash basis
B) expenses on an accrual basis are less than expenses on a cash basis
C) expenses on an accrual basis are the same as expenses on a cash basis
D) expenses on an accrual basis are greater than expenses on a cash basis
Accounts Payable
Money owed by a company to its creditors for goods and services that have been received but not yet paid for.
Accrual Basis
An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash transactions happen.
Cash Basis
An accounting method where revenues and expenses are recognized when cash is received or paid, rather than when earned or incurred.
- Comprehend the process of computing net cash flow from operating activities via the indirect method.
- Identify the effects of changes in accounts receivable, accounts payable, and inventory on cash flows from operating activities.
Verified Answer
Learning Objectives
- Comprehend the process of computing net cash flow from operating activities via the indirect method.
- Identify the effects of changes in accounts receivable, accounts payable, and inventory on cash flows from operating activities.
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