Asked by Jacqueline Segura on May 22, 2024
Verified
Which of the following causes net income to differ from cash flow?
A) Depreciation
B) The purchase of inventory on credit
C) The sale of merchandise on credit
D) All of the above
Net Income
The total earnings of a company after subtracting all expenses, taxes, and costs, indicating the company's profitability.
Depreciation
The accounting process of allocating the cost of tangible assets over their useful lives, reflecting wear and tear or obsolescence.
Inventory
A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold.
- Familiarize oneself with the discrepancies between net income and cash flow, with a special focus on how depreciation and accounts receivable affect financial health.
Verified Answer
Learning Objectives
- Familiarize oneself with the discrepancies between net income and cash flow, with a special focus on how depreciation and accounts receivable affect financial health.
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