Which of the following would cause net income on the accrual basis to be different (either higher or lower) than "cash provided by operating activities" on the statement of cash flows?
A)Recognized depreciation expense on equipment.
B)Incurred operating expenses on account.
C)Paying interest on a note that was accrued in a prior year.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Recognizing depreciation expense reduces net income, but does not affect cash flows for operating activities. Incurring operating expenses on account also reduces net income, but does not affect cash flows for operating activities. Paying interest that was accrued in a prior year will reduce cash flows for operating activities, but will not affect net income.
AICPA BB: Critical Thinking
AICPA FN: Measurement
AICPA FN: Reporting

Which of the Following Would Cause Net Income on the Accrual