To determine cash payments for operating expenses for the statement of cash flows using the direct method, a decrease in accrued expenses is added to operating expenses other than depreciation.
To determine cash payments under direct method the decrease in accrued expenses is added to the operating expenses payable . Accrued expense mean expenses incurred but not yet paid. A decrease in accrued expenses would suggest that accrued expenses have been paid therefore there has been an outflow of cash which will be added to cash paid for operating expenses.
