In the most general sense, which of the following would you expect to be true?
A) If a current asset account and a current liability account both increase by the same amount, there is a net use of funds.
B) If fixed assets decrease by the amount of depreciation for the year, there is a net use of funds.
C) Changes in income and expense accounts do not affect sources and uses of funds.
D) If a liability account increases and an asset account decreases by the same amount, there is a net source of funds.
E) If the common stock outstanding increases there is a use of funds.

Question

Quizplus · Accepted Answer

When a liability account increases and an asset account decreases by the same amount, it typically indicates that funds have been sourced from reducing assets or increasing liabilities, thus creating a net source of funds.

In the Most General Sense, Which of the Following Would