Why is net income a good place to start when attempting to determine the cash flows from

Question:

Why is net income a good place to start when attempting to determine the cash flows from operating activities using the indirect method? Why is it not the same as the net cash flow from operating activities?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting

ISBN: 978-0133052152

2nd edition

Authors: Robert Kemp, Jeffrey Waybright

See More Books

Question Posted: Apr 29, 2014 03:13 AM

See More Questions

The income statement and a schedule reconciling cash flows from operating activities to net income are provided below for Macro Soft Corporation. Required: Prepare the cash flows from operating...
5. Paul borrows $136 000. He agrees to make monthly payments for the next 20 years. The interest rate being charged is 6.6% /a compounded monthly. How much will Paul have to pay each month? How much...
The indirect method for reporting cash flows from operating activities can create an erroneous impression about noncash expenses (such as depreciation). What is the impression and why is it erroneous?
Prove that the function x2 x - 1 | f (x) = x 1)(x 2) is differentiable for all r E (-0, 1) U (1, 2) U (2, ). - |
Graph the following discrete-time dynamical systems, find the equilibria algebraically, and check whether the stability derived from the Slope Criterion for stability matches that found with...
Suppose the gas in Figure 7-8 is 0.100 mol He at 298 K, the two weights correspond to an external pressure of 2.40 atm in Figure 7-8(a), and the single weight in Figure 7-8(b) corresponds to an...
Consider a 10-year zero-coupon bond with face value $\$ 100$. The interest rate is fixed at 5\%. The credit spread for the bond is estimated to be $1 \%$ (except in part (a)). Calculate: (a) The...
(a) Use the production function in equation (5.6) and the rules for computing growth rates from page 51 of Chapter 3 to write the growth rate of per capita GDP as a function of the growth rate of the...
Consider the following information: Raw materials inventory, beginning $4,000 Raw materials inventory, ending 3,000. Net Purchases 25,000 Freight out 500% Decrease in Work in Process inventory Wip...
Write an essay Manufacturing Resource Planning (MRP II).
Wild Wheels, Inc., wholesales a line of custom mountain bikes. Wild Wheels inventory, as of November 30, 201 2, consisted of 20 mountain bikes costing $550 each. Wild Wheels trial balance as of...
A company's cash conversion cycle increased from 55 days in year 1 to 68 days in year 3. What are the implications of this increase? What do you think happens to the cash conver sion cycles of...
On January 2, 2012, Drexello, Inc., purchased $75,000 of 10%, five-year bonds of Fast Trucking as a held-to-maturity security at a price of $77,610 plus accrued interest. The bonds mature on November...
_____ is a particular type of receivable financing wherein the lender takes ownership of a receivable at a discount and then collects against it.
What 4 approaches does an industrial hygienist take to protect workers? Question 2 options: Anticipate, recognize, eliminate, control/mitigate Anticipate, register, mitigate, control Anticipate,...
To assess the value of a struggling restaurant, Jorge adds up the current fair market value of the kitchen equipment and other tangible and intangible assets and subtracts the amount of outstanding...
Select all that apply Investments in debt securities may be classified as Multiple select question. available-for-sale securities. current liabilities. equity securities. held-to-maturity securities....
Bribery of government officials commonly is used to obtain business contracts in many foreign countries. This practice is often concealed in company books as "_______." Question 27 options: obtaining...
The equilibrium constant for the reaction of chlorine gas with phosphorus trichloride to form phosphorus pentachloride is 33 at 250C. If an experiment is initiated with concentrations of 0.050 M PCl...
Cornell and Roberts are partners who agree to admit Stanley to their partnership. Cornell has a capital balance of $80,000 and Roberts has a capital balance of $120,000. Cornell and Roberts share net...
The methodology used in your organization calls for change requests to be considered by a change control board (CCB). After some reflection and a discussion with the programmer, you have decided to...
For the following transactions, indicate the account debited and the account credited. (a) Supplies are purchased on account. (b) Cash is received on signing a note payable. (c) Employees are paid...
For each account listed here, indicate whether it generally will have debit entries only, credit entries only, or both debit and credit entries. (a) Cash. (b) Accounts Receivable. (c) Dividends. (d)...
What are the basic steps in the recording process?
1- The binomial distribution N! B(M) = (N-M)!M! describes the probability of placing M identical particles into N equivalent physical sites, with a limit of one particle/site if the probability of a...
Margo, a calendar year taxpayer, paid $1,580,000 for new machinery (seven-year recovery property) placed in service on August 1, 2023. Required: a. Assuming that the machinery was the only tangible...
*** I am seeking assistance from a tutor who is familiar with aviation, and in particular, CASA (Australia's Civil Aviation Safety Authority) and I CAO SMS (Safety Management Systems) and the...

Why is net income a good place to start when attempting to determine the cash flows from

Question:

Step by Step Answer:

Net income approximates cash flows from operating acti...View the full answer

Financial Accounting

Students also viewed these Managerial Accounting questions