An Increase in a Liability Account Is a Source of Cash

question 31

True/False

An increase in a liability account is a source of cash flows.

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Definitions:

Salary Allowance

A fixed amount or benefit often added to an employee's salary, such as for travel or housing.

Capital Balance

The amount of money that shareholders have contributed to a company plus retained earnings or minus accumulated losses.

Net Income

What a business financially gains in the end, after subtracting expenses and taxes from its initial revenue.

Capital Balances

Capital balances refer to the amount of money that the owners or partners have invested in a business, not including any profits or losses that the business may earn or incur.