Quiz – T/F: An increase in accounts payable represents an increase in net cash

Fundamentals of Financial Management, Concise, 9e & 10e by Brigham and Houston

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An increase in accounts payable shows an increase in net cash from operating activities just like borrowing. An increase in accounts payable has an effect similar to taking about a loan from the bank. However, these two items show up in different places of the statement of cash flows to reflect the difference between operating and financing activities.

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