Which statement about net profit is not true?
A) Net profit normally represents the amount of cash generated from operations for the period.
B) Net profit increases equity.
C) Net profit is a measure of achievement or productive effort.
D) None of the statements, i.e. all are true.

Question

Quizplus · Accepted Answer

Net profit is not always equal to the amount of cash generated from operations. It is calculated by subtracting total expenses from total revenue earned during the period. It is possible for a company to have a net profit but not generate cash from operations, for example, if they have significant non-cash expenses such as depreciation or amortization.

Which Statement About Net Profit Is Not True