Cash provided by operating activities is generally the same as the net income reported on the income statement.19 A disadvantage of the indirect method of reporting cash flows provided (used) by operating activities is that the difference between the net amount of cash flows from operating activities and net income is not emphasized.

Question

Quizplus · Accepted Answer

Cash provided by operating activities and net income are not the same because cash flow considers actual cash transactions, while net income includes non-cash items like depreciation. The indirect method reconciles net income to cash flow, highlighting these differences.

Cash Provided by Operating Activities Is Generally the Same as the Net