Question
Which of the following is false with respect to the Statement of Cash Flows? A.Increases in accounts receivables, increases in inventories and increases in accounts
Which of the following is false with respect to the Statement of Cash Flows?
A.Increases in accounts receivables, increases in inventories and increases in accounts payables all generate cash inflows for the period.
B.Cash flows from operating activities convert the company's net income to cash by adjusting earnings for noncash expenses, nonoperating gains/losses, and accruals taken on operating items from the balance sheet.
C.Decreases in accounts receivables, decreases in inventories, and increases in payables will all result in cash inflows from operations.
D.Noncash expenses, like depreciation and amortization expenses, as well as, nonoperating losses are added back to net income to arrive at cash flows from operating activities.
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