The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

Question

Quizplus · Accepted Answer

This statement represents the basic accounting equation, which states that assets = liabilities + equity. Rearranging the equation, we get the statement "change in assets = change in liabilities + change in equity." However, since not all assets are cash (some are noncash assets like inventory or property), the statement further specifies that we need to add the change in noncash assets to get the overall change in assets.

The Change in Cash Is Equal to the Change in Liabilities