The statement of cash flows may be viewed in terms of the balance sheet equation.Which of the following expressions below is correct?
A)Change in Cash = Change in (Liabilities + Stockholders' Equity − Noncash Assets)
B)Change in Cash = Change in (Stockholders' Equity − Liabilities + Noncash Assets)
C)Change in Cash = Change in (Liabilities − Noncash Assets)
D)Change in Cash = Change in (Stockholders' Equity − Liabilities)

Question

Quizplus · Accepted Answer

The balance sheet equation can be rearranged to isolate the change in cash as follows:
Cash + Noncash Assets = Liabilities + Stockholders' Equity
Cash = Liabilities + Stockholders' Equity − Noncash Assets
Change in Cash = Change in (Liabilities + Stockholders' Equity − Noncash Assets)

The Statement of Cash Flows May Be Viewed in Terms