Which of the following is TRUE regarding cash flow?

Question

Quizplus · Accepted Answer

Profits can be used for a variety of purposes, such as reinvestment, debt repayment, or retained earnings, and may not result in cash flows that are immediately available to stockholders.

Answer: None of the other choices are true.

B) Dividend decisions are at the discretion of the board of directors and are not guaranteed to increase with net cash flows.

C) A profit can still be reported on the income statement even if cash outflows exceed cash inflows as expenses can be recognized on the income statement before cash payments are made.

D) An increase in revenue may not necessarily result in an increase in cash flow if there are corresponding increases in expenses or if payment for the revenue is not received immediately.

Which of the Following Is TRUE Regarding Cash Flow