Which of the Following Statements Regarding the Inclusion of Liabilities

question 2

Multiple Choice

Which of the following statements regarding the inclusion of liabilities on the statement of cash flows is true?

• A) All current liabilities affect the operating activities section.
• B) Long-term liabilities generally affect the investing activities section.
• C) A decrease in a current liability from the beginning to the end of the year is accompanied by a decrease of cash.
• D) A decrease in a current liability from the beginning to the end of the year is accompanied by an inflow of cash.

---

Definitions:

Republic

A form of government in which power is held by the people and their elected representatives, and which has an elected or nominated president rather than a monarch.

Referendum

A direct vote by the electorate on a specific question, proposal, or issue, often used to make decisions on legislative amendments or policy changes.

Fiscal Year

A one-year period used for accounting and financial purposes, which may or may not align with the calendar year.

Founding Fathers

The group of leaders who laid the foundational governance structures of the United States and were instrumental in the drafting of key documents such as the Declaration of Independence and Constitution.