Using the T-Account Approach

question 31

Multiple Choice

Using the T-account approach:

• A)Net income appears on the debit side of the cash account under operating activities.
• B)Payment of long-term debt appears on the debit side of the cash account under financing activities.
• C)Purchase of equipment appears on the credit side of the cash account under operating activities.
• D)An increase in accounts receivable appears on the debit side of the cash account.

---

Definitions:

Liabilities

Future sacrifices of economic benefits that an entity is obliged to make to other entities as a result of past transactions or other past events.

Raising Funds

The process of gathering financial resources from various sources to support business operations, projects, or investments.

Statement Of Cash Flows

A financial report that provides aggregate data regarding all cash inflows and outflows a company receives from its operational, investing, and financing activities.