Choose the correct answer for the below:
Which of the following statements is true?
a.If a company reports a net loss on its income statement, it should report a decrease in cash on its statement of cash flows.
b.If a company reports net income on its income statement, it should report an increase in cash on its statement of cash flows.
c.If a company uses the accrual basis of accounting, its cash balance can increase even if it reports a net loss.
d.If a company uses the accrual basis of accounting, it will improve its cash position if it reports net income for the same period.
Choose the correct answer for the below:
Which of the following statements is true?
a.If a company reports a net loss on its income statement, it should report a decrease in cash on its statement of cash flows.
b.If a company reports net income on its income statement, it should report an increase in cash on its statement of cash flows.
c.If a company uses the accrual basis of accounting, its cash balance can increase even if it reports a net loss.
d.If a company uses the accrual basis of accounting, it will improve its cash position if it reports net income for the same period.
Related questions
Suppose your company reports $200 of net income and $48 of cash dividends paid, and its comparative balance sheet indicates the following. | |||||||||||||||||||||||||||||||
| Beginning | Ending | |||||
| Cash | $ | 43 | $ | 243 | ||
| Accounts Receivable | 115 | 213 | ||||
| Inventory | 285 | 173 | ||||
| Total | $ | 443 | $ | 629 | ||
| Salaries and Wages Payable | $ | 18 | $ | 90 | ||
| Common Stock | 140 | 102 | ||||
| Retained Earnings | 285 | 437 | ||||
| Total | $ | 443 | $ | 629 | ||
