*USING AMAZON'S CASH FLOW STATEMENT BELOW*

1. Based on the information provided in the Operating section of Amazons Statement of Cash Flows, did Amazons inventory balance increase or decrease during fiscal year 2021? Did Accounts Payable/AP balance increase or decrease during 2021?

a) Inventories increased and Accounts Payable decreased

b) Inventories decreased and Accounts Payable decreased

c) Inventories decreased and Accounts Payable increased

d) Inventories increased and Accounts Payable increased

2. Considering the information provided by the change in accounts payable and change in inventory shown in the Operating section of Amazons Statement of Cash Flows, did Amazons cost of goods sold (COGS) overstate or understate the amount of cash it paid to its suppliers for inventory during fiscal year 2021? (Assume that Amazons accounts payable relate only to inventory.)

a) COGS understates cash paid to suppliers for inventory

b) COGS overstates cash paid to suppliers for inventory

c) COGS equals cash paid to suppliers for inventory