In order to determine the cash flows from day-to-day operations the firm must convert the company's income statement from an accrual basis to a cash basis.

Question

Quizplus · Accepted Answer

This is true. The cash flows from day-to-day operations can only be determined by converting the company's income statement from an accrual basis to a cash basis, as the accrual basis records revenues when they are earned, not when they are received, making it difficult to determine actual cash flow.

In Order to Determine the Cash Flows from Day-To-Day Operations