Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.

Name: Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Companies adjust net income (which is calculated on an accrual basis) for non-cash items and changes in working capital to determine cash provided by operating activities, effectively converting accrual basis accounting to cash basis for this purpose.

Companies Determine Cash Provided by Operating Activities by Converting Net