Spettel Corporation's comparative balance sheet appears below: The company's net income (loss) for the year was $11,000 and its cash dividends were $2,000.
-Which of the following classifications of changes in balance sheet accounts as sources and uses is correct?
A) The change in Accounts Payable is a use; The change in Accrued Wages and Salaries payable is a use
B) The change in Accounts Payable is a source; The change in Accrued Wages and Salaries payable is a use
C) The change in Accounts Payable is a source; The change in Accrued Wages and Salaries payable is a source
D) The change in Accounts Payable is a use; The change in Accrued Wages and Salaries payable is a source

Question

Spettel Corporation's comparative balance sheet appears below:  The company's net income (loss) for the year was $11,000 and its cash dividends were $2,000.
-Which of the following classifications of changes in balance sheet accounts as sources and uses is correct?
A) The change in Accounts Payable is a use; The change in Accrued Wages and Salaries payable is a use 
B) The change in Accounts Payable is a source; The change in Accrued Wages and Salaries payable is a use 
C) The change in Accounts Payable is a source; The change in Accrued Wages and Salaries payable is a source 
D) The change in Accounts Payable is a use; The change in Accrued Wages and Salaries payable is a source

Quizplus · Accepted Answer

The change in Accounts Payable is a source of cash, indicating that the company paid back its creditors, while the change in Accrued Wages and Salaries payable is a use of cash, indicating that the company paid its employees. The other changes in balance sheet accounts are not mentioned in the question and cannot be determined from the information given.

Spettel Corporation's Comparative Balance Sheet Appears Below: the Company's