Cash inflows and outflows always occur at the same time as revenues and expenses are incurred.

Question

Quizplus · Accepted Answer

Cash inflows and outflows may not always occur at the same time as revenues and expenses are incurred. Transactions may take time to process, such as when a customer takes several days or weeks to pay an invoice, or when a company pays for an expense on credit and the payment is due at a later date. Additionally, there may be timing differences between when revenue or expense recognition occurs for accounting purposes versus when the associated cash transaction takes place.

Cash Inflows and Outflows Always Occur at the Same Time