Which of the following is not accurate in depicting cash flows from operations?
A)(Revenues - expenses) (1 - tax rate) + (depreciation × tax rate)
B)(Revenues - expenses - taxes paid)
C)(Net profit + depreciation)
D)(Revenues - cash expenses - taxes paid)

Question

Quizplus · Accepted Answer

Option B is not accurate because it does not account for non-cash expenses such as depreciation, which can have a significant impact on cash flows from operations. The correct formula for cash flows from operations is to start with net profit and then add back non-cash expenses such as depreciation, and then make adjustments for changes in working capital and other cash inflows and outflows related to operating activities. Options A, C, and D all include these necessary adjustments.

Which of the Following Is Not Accurate in Depicting Cash