Which is not true about net operating cash flow

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Reference no: EM132490540

Question 1) Prepayments occur when:

A. Cash flow precedes expense recognition.

B. Sales are delayed pending credit approval.

C. Customers are unable to pay the full amount due when goods are delivered.

D. Manufactured goods await quality control inspections.

E. Insurance expense is recognized.

Question 2) Which of the following is not true about net operating cash flow?

A. It is the difference between cash receipts and cash disbursements from providing goods and services.
B. It is affected by depreciation method choice.
C. Over short periods, it may not be indicative of long-run cash-generating ability.
D. Operating cash flow excludes activity related to fixed assets.
E. Under the indirect method, the operating cash flow section adjusts for non-cash activities included in net income.

Reference no: EM132490540

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