Final answer:
An outflow of cash results from a decrease in a liability account, as in example (c), when a company pays off debts using its cash resources. Other changes in asset or equity accounts may not directly indicate cash flow movement. Additionally, the current account is affected by national trade balances, with outflows in the case of a trade deficit.
Step-by-step explanation:
An outflow of cash from a company could occur under a few scenarios. One such scenario is represented by the option (c) The decrease in a liability account. When a company pays off its debts or settles liabilities, it will use cash or cash equivalents. This results in cash flowing out of the business. For instance, if a company pays back a loan, the cash used to repay the loan will cause a reduction in its bank balance or cash on hand.
Asset accounts and equity accounts are other areas where changes might signal an outflow of cash, but not as directly. Decreasing an asset account other than cash does not necessarily mean cash outflow as it might involve exchanging one asset for another, such as selling inventory on credit. An increase in an equity account could potentially be associated with cash inflow, for example when the company issues new shares and receives cash in exchange. Another aspect of financial transactions concerns the national current account. If a nation is spending more on imports than it is earning from exports, there will be a net outflow of money which would make the current account more negative or less positive. Conversely, an inflow of funds, like earnings from exports exceeding the costs of imports, would make the current account less negative or more positive.