When using the indirect method of preparing a statement of cash flows, how will a $23,500 increase in accounts payable affect net income in the operating activities section of the statement of cash flows and why? a. There will be no effect, as this is a non-cash transaction/entry b. Increases in current liabilities are added to net income, so it will increase net cash by $23,500 C. Increases in current liabilities are deducted from net income, so it will decrease net cash by $23,500 d. There is no effect, as accounts receivable are on the balance sheet, not the income statement

When using the indirect method of preparing a statement of cash flows, how will a $23,500 increase in accounts payable affect net income in the operating activities section of the statement of cash flows and why? a. There will be no effect, as this is a non-cash transaction/entry b. Increases in current liabilities are added to net income, so it will increase net cash by $23,500 C. Increases in current liabilities are deducted from net income, so it will decrease net cash by $23,500 d. There is no effect, as accounts receivable are on the balance sheet, not the income statement

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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