question archive Question 1 An increase in an asset account on a company's balance sheet represents a use of cash
Question 1 An increase in an asset account on a company's balance sheet represents a use of cash
Subject:FinancePrice:2.86 Bought3
Question 1 An increase in an asset account on a company's balance sheet represents a use of cash. True False D
Question 2 An increase in a liability or equity account on a company's balance sheet represents a use of cash. True False
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Answer 1. True
Because there is a cash outflow when asset is purchased. Means cash is used for purchase. So statement is true.
Answer 2. False
Because when liability or equity is increasing that means cash is generating e.g. when we issue debentures or equity, there is a inflow of cash and cash is generating not using. So statement is false.
