Spontaneously Generated Funds

Funds generated if a liability account increases spontaneously (automatically) as sales increase.  An increase in a liability account is a source of funds, thus funds have been generated.  Two examples of spontaneous liability accounts are accounts payable and accrued wages.  Note that notes payable, although a current liability account, is not a spontaneous source of funds since an increase in notes payable requires a specific action between the firm and a creditor.
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