Which of the following activities affects net income,but has no immediate impact upon cash flows?
A)Collection of an account receivable
B)Making the end-of-period adjustment to record estimated uncollectible accounts
C)Investing excess cash in marketable securities
D)Write-off of an uncollectible account receivable against the allowance

Question

Quizplus · Accepted Answer

Making the end-of-period adjustment to record estimated uncollectible accounts affects net income through increasing expense (bad debt expense) but does not involve any immediate cash flow since it is an estimation of future cash flows that may not be collected.

Which of the Following Activities Affects Net Income,but Has No