Which of the Following Statements Regarding the Inclusion of Liabilities

question 157

Multiple Choice

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

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

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Definitions:

Journalize Closing Entries

The process of recording year-end closing entries in the journal to prepare the accounts for the next fiscal period.

Adjusting Entries

Entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Post-Closing Trial Balance

A listing of all company account balances after end-of-period adjustments and closing entries have been made, used to check the balance of debits and credits.

Adjusted Trial Balance

A listing of all company accounts that will appear on the financial statements after adjustments have been made for errors, accruals, and deferrals.