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Cash flow statement
How does increase in Accounts payable generates us the source of income? Please explain with examples. Thank you
Replies (3)
when you purchase goods on credit there's no immediate outflow of cash. so you are able to use that cash for business that's why while preparing CFS increase in AP results increase of cash flow. whereas increase in AR results in decrease in CF as there's no immediate inflow if cash
Got it ! Thank you very much sir
you are welcome
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