Accounting figures and cash flows are not necessarily the same due to the presence of certain non-cash expenditures on the firm's income statement.

Question

Quizplus · Accepted Answer

Non-cash expenditures, such as depreciation and amortization, do not involve the actual outflow of cash and therefore do not directly impact cash flows. However, they do affect accounting figures on the income statement, such as net income and earnings per share.

Accounting Figures and Cash Flows Are Not Necessarily the Same