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On the ACCA Study hub, in section 27.4.3, Activity 3, does anyone know why 400 was subtracted from both increase in trade payables and interest paid? Why wasn’t it subtracted from trade receivables as well?
The D/E for interest accrued is Dr Expense $400 and Cr Accruals $400 (which will be presented within trade payables in SoFP). Because it’s not a cash flow it’s an adjustment against the increase in payables and deducted from interest expense to find the cash flow “interest paid”. I have no idea whey you think it has anything to do with trade receivables.
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