Asked by Sherry Smith on Jun 26, 2024
Verified
An increase in a current asset must be accompanied by a corresponding increase in a current liability.
Current Asset
An asset on the balance sheet that is expected to be sold or otherwise used up in the near term, typically within one year, including cash, inventory, and receivables.
Current Liability
Financial obligations a company must settle within one year, including accounts payable, taxes, and short-term loans.
- Acquire comprehension of the scope and complications in the oversight of working capital, involving current assets and liabilities.
Verified Answer
HP
Hriday PatelJul 01, 2024
Final Answer :
False
Explanation :
An increase in a current asset does not necessarily need to be accompanied by a corresponding increase in a current liability. An increase in a current asset can be financed by an increase in equity or long-term liabilities.
Learning Objectives
- Acquire comprehension of the scope and complications in the oversight of working capital, involving current assets and liabilities.