Assume that the direct method is used to prepare the operating activities section of the statement of cash flows. Which of the following statements is

correct concerning a decrease in Accounts Payable?

Multiple Choice

Since the cash payments were more than the credit purchases, the decrease must be added to purchases to calculate cash payments to

suppliers.

Since the cash payments were less than credit purchases, the decrease must be added to purchases to calculate cash payments to

suppliers.

Since the cash payments were more than credit purchases, the decrease must be subtracted from purchases to cash payments to

suppliers.

Since the cash payments were less than credit purchases, the decrease must be subtracted from purchases to calculate cash payments to

suppliers.