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


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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