Which statement about net profit is not true?
A)Net profit normally represents the amount of cash generated from operations for the period.
B)Net profit is a measure of achievement or productive effort.
C)Net profit increases equity.
D)None of the statements, i.e., all are true.

Question

Quizplus · Accepted Answer

Net profit does not necessarily represent the amount of cash generated from operations for the period. It is calculated by deducting all expenses including non-cash expenses such as depreciation and amortization from revenues. Therefore, it includes non-cash items and may not always directly represent cash generated during the period.

Which Statement About Net Profit Is Not True