Street Corporation reported net income of $400,000 and a net cash flow from operating activities of $550,000 during the year.Which of the following could not have been a reason why Street's net cash flows from operating activities were greater than its net income?
A) Increase in accrued liabilities from the beginning of the year to the end of the year
B) Increase in accounts payable from the beginning of the year to the end of the year
C) Loss on the sale of equipment
D) Increase in accounts receivable

Question

Quizplus · Accepted Answer

An increase in accounts receivable would imply that more sales were made on credit, not necessarily resulting in immediate cash inflow, thus not explaining why cash flow from operations is higher than net income.

Street Corporation Reported Net Income of $400,000 and a Net