Register
When liabilities increase, this means that the firm has borrowed money or received contributions from shareholders. Therefore, increases in liabilities represent increases in cash. Group of answer choices
343,632 views
10 votes
10 votes
When liabilities increase, this means that the firm has borrowed money or received contributions from shareholders. Therefore, increases in liabilities represent increases in cash. Group of answer choices True False

User Leonaka
by
3.0k points

1 Answer

16 votes
16 votes

Answer:

The answer is true

Step-by-step explanation:

Increasing Liabilities is increasing cash inflow. For example, if a firm borrows money from a bank, it increases its liabilities and also increases its cash account because the bank will credit the firm with the borrowed form.

Also, if shareholders contribution increase by way of funding the company, the cash is being injected into the firm, thereby increasing the cash reserves.

Therefore, the answer to the question is true.

User Ralf Htp
by
3.2k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

1.6m questions

2.0m answers

Other Questions

If the rate of inflation in Japan dramatically increases while the rate of inflation in the United States remains constant, then a. the demand curve for dollars shifts to the left. b. the demand curve
Kylie is risk averse and has $1,000 with which to make a financial investment. She has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option
From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that Group of answer choices bond interest is deductible for tax purposes. interest must be
Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow: (1) Work full time at a local accounting firm
In January of the current year, Dora made a gift of stock to her granddaughter. At the time of the gift, the stock was worth $15,000. Several months later in the same year after the gift, a $500 dividend
Link Copied!