Which of the following statements regarding the inclusion of liabilities on the statement of cash flows is true?
A) All current liabilities affect the operating activities section.
B) Long-term liabilities generally affect the investing activities section.
C) A decrease in a current liability from the beginning to the end of the year is accompanied by a decrease of cash.
D) A decrease in a current liability from the beginning to the end of the year is accompanied by an inflow of cash.

Question

Quizplus · Accepted Answer

A decrease in a current liability indicates that a company has paid off some of its liabilities, which results in a cash outflow, thus decreasing cash.

Which of the Following Statements Regarding the Inclusion of Liabilities