A change in a company's cash account is equal to the:
A)changes in liabilities and shareholders' equity minus the change in noncash assets.
B)changes in liabilities minus the changes in shareholders' equity and noncash assets.
C)sum of the changes in liabilities,shareholders' equity and noncash assets.
D)change in noncash assets minus the changes in liabilities and shareholders' equity.

Question

Quizplus · Accepted Answer

A change in a company's cash account equals the changes in liabilities and shareholders' equity minus the change in noncash assets. This is because the accounting equation (Assets = Liabilities + Shareholders' Equity) must always balance, and an increase in cash (an asset) must be balanced by a corresponding increase in liabilities and/or equity, or a decrease in other assets.

A Change in a Company's Cash Account Is Equal to The