Suppose a company generally records revenues and expenses before receiving or making cash payments.Which of the following statements is not correct?
A)If revenues are falling,a net loss could result even though the company reports a net cash inflow from operating activities.
B)If revenues are rising,net income could result even though the company reports a net cash outflow from operating activities.
C)Net income and net cash flows provided by operating activities will always agree.
D)The income statement doesn't explain changes in cash because it focuses on just the operating results of the business.

Question

Quizplus · Accepted Answer

The timing of cash receipts and payments may differ from the accrual-based income statement,which reports revenues when they are earned and expenses when they are incurred.As a result,net income and net cash flow provided by operating activities may differ.

Suppose a Company Generally Records Revenues and Expenses Before Receiving