Using the Accounts Receivable account, explain how a company may report net income on its income statement using the accrual basis but report negative cash flow from operating activities on its statement of cash flows using the cash basis. [Hint: Assume that you calculate an excess of revenues over expenses (i.e., net income on the accrual basis) but your calculation of cash flow from operating activities (i.e., the cash basis) produces a negative number. That is, cash is used rather than provided. See chapters 1, 4 and 21.]

What steps do you recommend be taken to ensure that net cash flow from operating activities is positive next year? [Hint: Analyze the Accounts Receivable account.]