Net income is always used in determining a company's cash flow from operations.

Question

Quizplus · Accepted Answer

Net income is not always used in determining a company's cash flow from operations. The cash flow statement is prepared using both the income statement and balance sheet and involves adjustments to net income to account for non-cash items such as depreciation and changes in working capital accounts. Therefore, net income may be a starting point, but it is not the sole determinant of a company's cash flow from operations.

Net Income Is Always Used in Determining a Company's Cash