Question

multiple choice question which of the following statements is correct concerning a decrease in accounts payable? multiple choice question. since the cash payments were less than credit purchases, the decrease must be subtracted from purchases to calculate cash payments to suppliers. 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 more than credit purchases, the decrease must be subtracted from 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.

Answer 1

A decrease in accounts payable must be subtracted from purchases to calculate cash payments to suppliers.

Step-by-step explanation:

The correct statement concerning a decrease in accounts payable is: since the cash payments were less than credit purchases, the decrease must be subtracted from purchases to calculate cash payments to suppliers.

Accounts payable represents the amount owed by a company to its suppliers for goods or services purchased on credit. When accounts payable decreases, it means that the company has made payments to reduce its outstanding debt to suppliers.

To calculate cash payments to suppliers, you would start with credit purchases and subtract any decrease in accounts payable. This is because the decrease in accounts payable indicates that the company is paying off some of its outstanding debt, resulting in less cash owed to suppliers.