A FASB discussion memorandum suggested that cash flow data are a useful supplemental disclosure for all of the following reasons except:
A)they provide information about the quality of income.
B)they aid in assessing flexibility and liquidity.
C)they help to identify the relationship between accounting income and cash flows.
D)they are a better predictor of future earnings than is accounting income.

Question

Quizplus · Accepted Answer

The FASB discussion memorandum did not suggest that cash flow data are a better predictor of future earnings than accounting income. Instead, the memorandum focused on how cash flow data can provide information about the quality of income, assist in assessing flexibility and liquidity, and help to identify the relationship between accounting income and cash flows.

A FASB Discussion Memorandum Suggested That Cash Flow Data Are