Question #1: If I want to know how much cash a company has, I can simply view the company's Balance Sheet and view the cash balance there. What though is the challenge presented in only relying on the Balance Sheet to identify how much cash a company has? | Question #2: If I want to know how much cash a company has, I can simply view the company's Income Statement and view how much revenue the company earned. What though is the challenge presented in relying on the Income Statement to identify how much cash a company has? Question #3: Why is it necessary to convert accrual-based net income to a cash basis when preparing a statement of cash flows? -It is necessary to convert accrual-based net income to cash-basis income because the unadjusted net income includes items that do not provide or use cash. For example, an increase in accounts recievables. Question #4: Your coworker is puzzled. During the last year, the company in which he/she is a stockholder reported a net loss of $675,000, yet its cash increased $321,000 during the same period of time. Explain to your coworker how this situation could occur. Question #5: What are some of the arguments in favor of using the indirect (reconciliation) method as opposed to the direct method for reporting a statement of cash flows?