An increase in current liabilities is a source of cash for the firm.

Name: An increase in current liabilities is a source of cash for the firm.
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Question

Quizplus · Accepted Answer

An increase in current liabilities means the firm has borrowed more money or has more unpaid expenses, which increases the available cash for the firm. However, this is not a permanent source of cash and will eventually need to be paid back or settled, so it is not a long-term solution.

An Increase in Current Liabilities Is a Source of Cash