Which of the following has a different effect on net profit than it does on cash flow?
A) Payment for wages
B) Cash sale to customer
C) Amortisation of a patent
D) Payment for rent

Question

Quizplus · Accepted Answer

Amortisation of a patent is a non-cash expense, which reduces net profit but has no effect on cash flow. Both payment for wages and rent affect both net profit and cash flow, while a cash sale to a customer increases both net profit and cash flow.

Which of the Following Has a Different Effect on Net