Suppose a Company Generally Records Revenues and Expenses Before Receiving

Multiple Choice

Suppose a company generally records revenues and expenses before receiving or making cash payments. Which of the following statements is NOT true?

A) If sales are falling, net losses could occur even though the company reports net cash inflows from operating activities.
B) If sales are rising, net profits could occur even though the company reports net cash outflows from operating activities.
C) Net income and cash flows will always agree because even though revenues and expenses can be recorded in different time periods than their related cash flows the differences will cancel out and the results will be the same.
D) When the indirect method is used, net cash flows from operating activities includes adjustments for non-cash expenses such as depreciation which would cause net cash from operating activities to be different from net