Asked by Daniel Alvarez on Jul 05, 2024
Verified
When payments are paid on accounts payable, then it is considered a use of cash.
Accounts Payable
Accounts payable is the amount of money that a company owes to its suppliers or creditors for goods and services received but not yet paid for, typically due within a short period, like 30 or 60 days.
Use of Cash
Refers to how a business or individual employs their cash resources, including spending, investing, or saving activities.
- Scrutinize the role of differing financial activities in influencing a firm's cash inflow and outflow.
Verified Answer
ZK
Zybrea KnightJul 06, 2024
Final Answer :
True
Explanation :
Payments on accounts payable reduce the company's cash balance, thus they are considered a use of cash in cash flow analysis.
Learning Objectives
- Scrutinize the role of differing financial activities in influencing a firm's cash inflow and outflow.