If a company's sales were all for cash and it paid all expenses in cash as incurred,then the net cash flow from operating activities would equal net income.

Question

Quizplus · Accepted Answer

Net cash flow from operating activities is calculated by adjusting net income for non-cash items such as depreciation and changes in current assets and liabilities. If all sales were for cash and all expenses were paid in cash, there would be no non-cash items to adjust for, and net cash flow from operating activities would equal net income.

If a Company's Sales Were All for Cash and It