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Difference Between Net Income and Cash Flow

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1. A company acquired a computer for 20,000 and paid for it in full by issuing 1,000 shares of its own common stock, par $10 (current market value $20 share). This transaction should not be reported on the statement of cash flows since no cash was paid out nor received.

True or False

2.A growing difference between net income and cash flow form operations can be a sign of management manipulations of the company's earning?

True or False

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Solution Preview

1. A company acquired a computer for 20,000 and paid for it in full by issuing 1,000 shares of its own common stock, par $10 (current market value $20 share). This transaction should not be reported on the statement of cash flows since no cash was paid out nor received.

True or False

True as there is no ...

Solution Summary

Response helps in guiding about the difference between net income and cash flow

$2.19