Which of the following is not true about net operating cash flow?
A) It is the difference between cash receipts and cash disbursements from providing goods and services.
B) It is a measure used in accrual accounting and is recognized as the best predictor of future operating cash flows.
C) Over short periods, it may not be indicative of long-run cash-generating ability.
D) It is easy to understand and all information required to measure it is factual.

Question

Quizplus · Accepted Answer

Net operating cash flow is a concept used in cash accounting rather than accrual accounting. It focuses on actual cash transactions rather than accruals, making choice B incorrect as it inaccurately associates net operating cash flow with accrual accounting.

Which of the Following Is Not True About Net Operating