Decrease in accrued wages agar hai to cash payment for operating expense me add hoga ki less ? Aur kyu ?
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We know accrued wages is our current liability so a decrease in them indicates that during the year we have paid some of the accrued wages, Correct?! That’s the reason we deduct it while calculate Cash Flows from Operating Activities,
Hope this helps !
1 st step : Think. Decrease in accrued wages yani ki humari liabilities kam hui and iska matlb ye ki humne payment kia yani ki humara cash kam hua.
Now, cash payment for operating expenses already humara outflow of cash hai toh outflow me outflow add hoga.
which means decrease in accrued wages will be added to cash paid of operating expenses.
I hope you understand the hindi language. If not please reply back.
Understood !! Thank you 🙏