Non-cash accounting entries that may show up on an income statement such as depreciation, amortization, and asset transfers are ignored in forecasting the cash flow statement.

Question

Quizplus · Accepted Answer

These non-cash accounting entries are ignored in cash flow forecasting because they do not directly affect the actual cash inflows or outflows of a business. The cash flow statement focuses on the actual movement of cash, hence non-cash transactions like depreciation, amortization, and asset transfers are excluded.

Non-Cash Accounting Entries That May Show Up on an Income