Question

Which of the following would cause net income on the accrual basis to be different from (either higher or lower than) "cash provided by operating activities" on the statement of cash flows?Paid advertising expense. Purchased supplies for cash. Purchased land for cash. Paid dividends to stockholders.

Answer 1

Answer:

Purchased supplies for cash

Explanation: Net income is a term used in Financial Institution to describe the total amount earned by a business Organisation after the total cost or expenses and taxes have been deducted, it can also be called the Net profit.

Accrual based accounting is an accounting concept that tends to recognize and record earnings as at when they are earned rather than when cash is received.

PURCHASED SUPPLIES FOR CASH IS THE POSSIBLE SITUATION WHERE NET INCOME CALCULATED USING ACCRUAL BASIS WILL BE DIFFERENT FROM "CASH PROVIDED BY OPERATING ACTIVITIES" IN THE CASH FLOW STATEMENT.

Answer 2

Answer:

Purchased Supplies for cash.

Explanation:

Purchased Supplies for cash is cash outpouring for working exercises, however won't be accounted for as a cost until the provisions are utilized.