The general rule for determining the cash flow received from any revenue or paid for any expense (except depreciation,which is a special case)is to determine the potential cash payments or cash receipts and add the amount not paid or not received.

Question

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The general rule for determining cash flow from revenue or paid for expenses is to consider the actual cash payments or cash receipts, not to add amounts not paid or not received. Depreciation is a non-cash expense and thus does not directly affect cash flow.

The General Rule for Determining the Cash Flow Received from Any