Using the T-Account Approach to Preparing the Statement of Cash

question 90

True/False

Using the T-account approach to preparing the statement of cash flows,an increase in accounts payable would appear on the debit side of the cash account.An increase in accounts payable indicates that purchases on account exceed payments on account,so cash would increase.

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Definitions:

Privity

The relationship between parties that are legally participating in the same transaction or agreement.

Accountant Negligence

A situation where an accountant fails to perform their duties with the required level of care and accuracy, leading to financial loss.

Professional Standards

The established practices, behavior, and ethical guidelines that professionals are expected to adhere to in their occupation.

Liability Threat

A potential for being held responsible under law for injury or damage, posing a risk to individuals or organizations.