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:

Marginal Benefits

The extra pleasure or benefit obtained from acquiring or creating an additional unit of a product or service.

Recreation Center

A facility provided for leisure activities which may include sports fields, swimming pools, and other amenities for public use.

Marginal Costs

Refers to the increase in total production cost that arises when the quantity produced is incremented by one unit.

Flood-Control

A set of measures implemented to prevent or reduce the damage caused by excessive water accumulation from rivers, seas, or heavy rainfall.