Which of the following would cause net income on the accrual basis to be different than (either higher or lower than) "cash provided by operating activities" on the statement of cash flows?
A) Purchased supplies for cash.
B) Purchased land for cash.
C) Invested cash in an interest earning account.
D) All of these are correct.

Question

Quizplus · Accepted Answer

Purchasing supplies for cash is a cash outflow for operating activities, but will not be reported as an expense until the supplies are used. Purchasing land is a cash flow for investing activities and does not affect net income. Investing cash in an interest earning account is a cash flow for investing activities and the investment itself does not affect net income.

Which of the Following Would Cause Net Income on the Accrual