An increase in cash flow is a debit on the cash flow statement.

An increase in cash flow is a debit on the cash flow statement.

• A. True
• B. False
• C. It depends
• D. Not sure

Answer: (A)

In double-entry accounting, cash is an asset with a normal debit balance. When cash increases, you record a debit to the Cash account; when cash decreases, you credit Cash. The cash flow statement shows how cash moved during the period (inflows and outflows), and those increases in cash come from debit entries to the Cash account in the underlying books. So an increase in cash is a debit in the records that underlie the cash flow statement, even though the statement itself presents cash inflows and outflows rather than debit/credit notation.

In double-entry accounting, cash is an asset with a normal debit balance. When cash increases, you record a debit to the Cash account; when cash decreases, you credit Cash. The cash flow statement shows how cash moved during the period (inflows and outflows), and those increases in cash come from debit entries to the Cash account in the underlying books. So an increase in cash is a debit in the records that underlie the cash flow statement, even though the statement itself presents cash inflows and outflows rather than debit/credit notation.