A company reported net income of $950,000.What can be said of its cash from operations?

Question

Quizplus · Accepted Answer

Without additional information, we cannot determine the amount of cash from operations. Net income is calculated using the accrual basis of accounting, which includes non-cash expenses such as depreciation and amortization. Cash from operations is calculated using the cash basis of accounting, which does not include non-cash expenses. Therefore, we need more information to determine the difference between net income and cash from operations.

A Company Reported Net Income of $950,000