A change in a company's cash account is equal to the:
A) changes in liabilities, stockholders' equity, and noncash assets.
B) changes in liabilities minus the changes in stockholders' equity and noncash assets.
C) sum of the changes in liabilities, stockholders' equity and noncash assets.
D) change in noncash assets minus the changes in liabilities and stockholders' equity.

Question

Quizplus · Accepted Answer

A change in a company's cash account will impact its overall balance sheet equation, which requires that assets equal liabilities plus stockholders' equity. Therefore, any change in the cash account must be offset by an equal and opposite change in one or more of the other categories. This means that the changes in liabilities, stockholders' equity, and noncash assets must all be taken into account when analyzing the impact of a change in the cash account.

A Change in a Company's Cash Account Is Equal to The