A company reporting net income will always show an increase in cash for the same period.

Question

Quizplus · Accepted Answer

Net income is calculated by subtracting expenses from revenue, but it does not necessarily reflect the actual cash received or spent during the period. Other factors such as non-cash expenses, changes in working capital, and capital expenditures can impact the cash flow statement. Therefore, a company reporting net income may or may not show an increase in cash for the same period.

A Company Reporting Net Income Will Always Show an Increase