Which of the following statements is not true with respect to the thinking required to convert accruals basis information to cash basis to prepare the statement of cash flows using the indirect method (reconciliation)?
A)decrease in current assets means an increase in cash
B)increase in current assets means a reduction in cash
C)increase in current liabilities means a decrease in cash
D)decrease in current liabilities means a decrease in cash

Question

Quizplus · Accepted Answer

An increase in current liabilities typically means an increase in cash, as it indicates that expenses have been incurred but not yet paid, thus conserving cash.

Which of the Following Statements Is Not True with Respect