What happens to a firm whose uses of cash exceed its sources of cash during an accounting period?

Question

Quizplus · Accepted Answer

When a firm's uses of cash exceed its sources of cash during an accounting period, it experiences a decrease in cash balance. This means that the firm is spending more money than it is bringing in, resulting in a negative cash flow. The firm may need to either borrow on a short-term basis or find ways to decrease its spending in order to improve its cash flow situation. The declaration of a net loss on the income statement may be a consequence of the negative cash flow, but it is not the direct result of the firm's uses of cash exceeding its sources of cash.

What Happens to a Firm Whose Uses of Cash Exceed