Only changes in current asset and liability accounts relate to cash flow from operations.

Question

Quizplus · Accepted Answer

This statement is true. Cash flow from operations only takes into account changes in current assets and liabilities, as these are the accounts that directly affect the cash balance of the business. Other changes in non-current accounts (such as fixed assets or long-term liabilities) are not included in cash flow from operations.

Only Changes in Current Asset and Liability Accounts Relate to Cash