Question: Why are losses added back to and gains subtracted from
Why are losses added back to and gains subtracted from net income when cash from operations is calculated using the indirect method?
Answer to relevant QuestionsExplain why net income isn't equal to cash from operations.Why is it important for stakeholders to be aware of an entity's liquidity? What are the consequences of not having adequate liquidity? Explain.What information does the cash flow statement provide to stakeholders that isn't in the income statement? Explain why a decrease in inventory means that cash paid for inventory during a period is less than the amount of inventory expensed.Dickens Tailor Shop (Dickens) makes tailored-to-measure suits, jackets, and pants for men and women. Customers who are interested in purchasing tailored-to-measure clothing make an appointment with one of Dickens’ tailors, ...
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