Which of the following is NOT true? When a liability increases:
A) cash may increase.
B) revenue may increase.
C) another liability may decrease.
D) expenses may increase.

Question

Quizplus · Accepted Answer

When a liability increases, it means that an obligation or debt has increased. This could be due to a loan taken, accrued expenses, or other reasons. An increase in liability may be accompanied by an increase in cash (A), as cash may be borrowed to pay for the liability. Another liability may decrease (C) if one liability is offset by another liability. Expenses may increase (D) if the liability is related to expenses like rent, utilities, etc. However, revenue (B) is not related to liabilities and is not impacted by their increase or decrease.

Which of the Following Is NOT True? When a Liability