Asked by
Denise Norris
on Oct 15, 2024Verified
Cash flows are essentially the same as net income because they are both measured using accrual accounting principles.
Cash Flows
The complete sum of funds flowing into and leaving a business, significantly impacting its liquidity.
Net Income
is the total earnings of a company after all expenses and taxes have been subtracted from total revenue; a key indicator of financial health.
Accrual Accounting
An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash transactions occur.
- Acknowledge the significance of cash flow figures and the timing of these flows in the planning and analysis of operations.
- Comprehend how transactions and events influence the cash balance at the end of a period.
Verified Answer
JJ
Learning Objectives
- Acknowledge the significance of cash flow figures and the timing of these flows in the planning and analysis of operations.
- Comprehend how transactions and events influence the cash balance at the end of a period.