Which of the Following Is NOT a Reason Why Cash

question 71

Multiple Choice

Which of the following is NOT a reason why cash flow may not equal net income?

• A)Amortization is added in when calculating net income.
• B)Changes in inventory will change cash flows but not income.
• C)Capital expenditures are not recorded on the income statement.
• D)Depreciation is deducted when calculating net income.

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Definitions:

Raw Materials

Basic materials obtained in their natural state that are processed to produce goods or provide services.

Code Classifications

Systems or methods for organizing laws, regulations, or standards into categories for easier reference and application.

Catchall Category

A broad classification used to group items or concepts that do not fit neatly into other categories.

Instruments

Formal legal or financial documents that represent some monetary value or agreement, including notes, bonds, contracts, and deeds.