Decreases in current assets cause operating cash flows to be higher than accrual-basis net income.

Name: Decreases in current assets cause operating cash flows to be higher than accrual-basis net income.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Decreases in current assets, such as accounts receivable or inventory, indicate that cash has been collected or inventory has been sold, which increases cash flow without affecting net income, thus making operating cash flows higher than accrual-basis net income.

Decreases in Current Assets Cause Operating Cash Flows to Be