Why the change in accounts payable is subtracted


Excerpts from Raimo Corporation's comparative balance sheet appear below: ending balance beginning balance Cash and cash equivalents $42,000 30,000 Inventory 411,000 389,000 accounts payable 83,000 79,000 Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method? The change in Inventory is added to net income; The change in Accounts Payable is subtracted from net income The change in Inventory is added to net income; The change in Accounts Payable is added to net income The change in Inventory is subtracted from net income; The change in Accounts Payable is added to net income The change in Inventory is subtracted from net income; The change in Accounts Payable is subtracted from net income

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Accounting Basics: Why the change in accounts payable is subtracted
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