The difference between net income and cash flow may be due to all of the following except:
A)use of the direct method of presenting cash flows from operating activities.
B)the company being brand new.
C)fraudulent financial reporting.
D)seasonal variations in a company's operating activities.

Question

Quizplus · Accepted Answer

Net income and net cash flow may differ due to seasonal variations,being at the start of the corporate life cycle,overstating revenues or understating expenses,or changes in working capital management.The cash flows from operating activities calculated using the direct method will be the same as the amount calculated using the indirect method.

The Difference Between Net Income and Cash Flow May Be