Using cash to settle a liability involves making a payment in the form of cash to fulfill a financial obligation, such as paying off a loan, settling an invoice, or covering expenses. This transaction reduces both the cash balance and the corresponding liability on the balance sheet. It reflects a direct exchange where the debtor fulfills their obligation, thereby improving their financial position. Additionally, settling liabilities with cash can enhance a company's creditworthiness by demonstrating its ability to meet financial commitments.
Liabilities are decreased by a debit entry...typically a cash payment (Dr. the liability; Cr. Cash)
Cash at the bank is an asset for you but a liability for the bank if it is held in a checking or regular savings account.
Paying a liability typically decreases your assets because it involves using cash or other resources to settle the obligation. For instance, when you pay off a loan, your cash decreases, leading to a reduction in your total assets. However, the overall financial position may improve in terms of reduced debt.
Asset.
ASSET
Cash discounts are a liability.
Yes, cash received is an asset while stock issued is liability. Cash is asset because this cash now be use for the business benefit.
No
Liabilities are decreased by a debit entry...typically a cash payment (Dr. the liability; Cr. Cash)
Cash at the bank is an asset for you but a liability for the bank if it is held in a checking or regular savings account.
Paying a liability typically decreases your assets because it involves using cash or other resources to settle the obligation. For instance, when you pay off a loan, your cash decreases, leading to a reduction in your total assets. However, the overall financial position may improve in terms of reduced debt.
Asset.
ASSET
no
income tax liability is not part of cash flow statement rather it is part of balance sheet.
no it just decreases cash
is an asset