The cash flows received from operations reported in the statement of cash flows should be exactly equal to the revenue the firm reports on its income statement.

Question

Quizplus · Accepted Answer

The cash flows received from operations reported in the statement of cash flows might be different than the revenue the firm reports on its income statement due to various factors such as changes in inventory, accounts receivable, and accounts payable. The statement of cash flows provides information about the actual cash inflows and outflows during the period, whereas the income statement reports the revenue earned during the period, which may not necessarily translate into cash received during the same period.

The Cash Flows Received from Operations Reported in the Statement