Answered: What is the effect on cash when current…

What is the effect on cash when current liabilities increase? A. Cash increases by the same amount. B. Cash decreases by the same amount. C. Cash decreases by twice as much. D. Cash does not chang

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 8MC: What is the effect on cash when current liabilities increase? A. Cash increases by the same amount....

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Concept explainers

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.

Question

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What is the effect on cash when current liabilities increase?

A. Cash increases by the same amount.

B. Cash decreases by the same amount.

C. Cash decreases by twice as much.

D. Cash does not change.

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Accounting for Cash and cash equivalents

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