If a company has net income for the current year, then its year-end cash balance must be greater than its beginning of the year cash balance.

Question

Quizplus · Accepted Answer

This statement is not necessarily true. While net income can contribute to an increase in cash balance, other factors such as investments, loans, and operating expenses could result in a decrease in cash balance even if the company has net income for the year.

If a Company Has Net Income for the Current Year