A furniture company is expanding its operations.Which of the following would be reflected in the cash flow statement but not in the income statement?

Question

Quizplus · Accepted Answer

A build-up of inventory would be reflected in the cash flow statement as an increase in the cash outflow for inventory purchases, but it would not necessarily affect the income statement unless the inventory becomes obsolete or otherwise has to be written down. The other choices would be reflected in both the cash flow statement and the income statement. B would result in increased salaries and commissions expense on the income statement, C would result in increased rent expense on the income statement, and D would result in increased cash receipts on the cash flow statement and increased sales revenue on the income statement.

A Furniture Company Is Expanding Its Operations