Which of the following statements about the statement of cash flows is not correct?
A)The statement of cash flows can be used to assess the likelihood of a company paying dividends.
B)Net cash flow is the best measure of profitability since it does not rely on estimates.
C)A company can have positive net income but at the same time have negative cash flow.
D)The statement of cash flows is the only financial statement that reports business activities affecting cash.

Question

Quizplus · Accepted Answer

Accrual-based net income is the best measure of profitability in spite of the estimates made.A company can have positive net income but negative cash flow if it has cash going out for inventory and operating expenses more quickly than it is collecting cash from customers.

Which of the Following Statements About the Statement of Cash