A company reported net income for the current year.Which of the following business transactions would cause its cash from operating activities to be higher than its net income?

Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash item that reduces net income, but it does not affect cash. Therefore, cash from operating activities will be higher than net income if depreciation expense is added back to net income. A, C, and D are all transactions that would decrease cash from operating activities.

A Company Reported Net Income for the Current Year