A decrease in a liability will be reported as a use of cash on the cash flow statement.

Name: A decrease in a liability will be reported as a use of cash on the cash flow statement.
Brand: Quizplus
Rating: 4.9 (37 reviews)

Question

Quizplus · Accepted Answer

When a liability decreases, it means the company has paid off some of its debt or obligations, which is a use of cash as it reduces the amount of money that the company has on hand. Therefore, a decrease in a liability will be reported as a use of cash on the cash flow statement.

A Decrease in a Liability Will Be Reported as a Use