A change in cash can be accounted for by changes in
A)liabilities.
B)shareholder's equity.
C)noncash assets.
D)all of the choices are correct.

Question

Quizplus · Accepted Answer

A change in cash can be accounted for by changes in liabilities, shareholder's equity, and noncash assets. For example, if a company takes out a loan, its liabilities increase, but it also receives cash, so its cash balance increases. Additionally, if a company issues new shares of stock, its shareholder's equity increases, but it may also receive cash from the stock issuance, which would increase its cash balance. Finally, if a company sells an asset, such as a piece of equipment, its noncash assets decrease, but it also receives cash from the sale, so its cash balance increases.

A Change in Cash Can Be Accounted for by Changes