The cash flow statement will show a positive cash inflow from operations as long as the cost of inventory remains below the selling price.

Question

Quizplus · Accepted Answer

The cash flow statement will show a positive cash inflow from operations if the cash received from sales is greater than the cash paid for operating expenses, including the purchase of inventory. The cost of inventory compared to the selling price does not determine the cash inflow from operations.

The Cash Flow Statement Will Show a Positive Cash Inflow