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 debts or obligations, which results in a cash outflow, thus reducing the cash balance.

Which of the Following Statements Regarding the Inclusion of Liabilities