Qtopia Company Uses the Direct Method to Prepare Its Cash

True/False

Qtopia Company uses the direct method to prepare its cash flow statement.It has reported Cost of sales of $70 000 on its income statement for the year 2016.If the balance in accounts payable (for inventory suppliers only)has gone down by $5 000 during the year,then $5 000 will have to be added to $70 000 as part of the process to calculate payments to suppliers for inventory purchases.