An increase in a liability account represents a source of funds.

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An increase in a liability account, such as accounts payable or loans payable, means that a company owes more money to its creditors, which represents a source of funds that can be used to finance the company's operations or investment activities. However, it is important to note that not all increases in liabilities are positive, as some may result from losses or obligations that need to be settled in the future.

An Increase in a Liability Account Represents a Source of Funds