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Net income versus operating cash flow

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What pros and cons of cash flow reporting versus accrual income reporting?

© BrainMass Inc. brainmass.com September 24, 2018, 9:49 am ad1c9bdddf - https://brainmass.com/business/accounting/net-income-versus-operating-cash-flow-62777

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RESPONSE:

Briefly, for accounting purposes, the best method regardless of the type of business (except possibly a doctor) is the accrual-based method.

Cash-based accounting can distort the true operations of your business and incorrectly reflect income. Cash-based accounting recognizes income when money is received. Accrual-based ...

Solution Summary

This solution discusses the pros and cons of cash flow reporting versus accrual income reporting.

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