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Homework answers / question archive / A firm’s net income may be greater than its net cash flows because the firm Question options:   sold merchandise on credit   did not pay dividends   deferred income taxes   deducted depreciation expense

A firm’s net income may be greater than its net cash flows because the firm Question options:   sold merchandise on credit   did not pay dividends   deferred income taxes   deducted depreciation expense

Finance

A firm’s net income may be greater than its net cash flows because the firm

Question options:

 

sold merchandise on credit

 

did not pay dividends

 

deferred income taxes

 

deducted depreciation expense

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The answer is "sold merchandise on credit"

Reason: when goods are sold on credit they are counted in the income and sales of the year in which they are sold while cash is received later on, due to which income gets increased while the net cash flow gets decreased due to increase in current assets(debtors ).