No, Net Income is an item on a Profit/Loss statement. It is gross revenue minus all expenses. Depending on your type of business, you may have a Cost of Goods section, which would be subtracted from Gross Revenue, and an Expenses section, which is also subtracted from Gross Revenue to obtain Net Income.
Cash outlays like Equipment Purchases and repaying the Principal portion of a loan are not considered expenses and do not affect Net Income. These type of transactions will affect the Balance Sheet. The amount of Cash that you have is also a balance sheet item. When equipment is purchased, it will be depreciated according to a depreciation table (determined by the class of equipment, could be something like a 3-year, 5-year, 10-year, 30-year, etc.) The amount of depreciation taken each year does go on the Profit/Loss Statement as an expense. For the loan payment, the portion of the payment that goes towards interest is an expense and will affect Net Income.
19. What effect will the declaration and distribution of a stock dividend have on net income and cash flows? (Points : 2)No effect on net income or cash flowsNo effect on net income, decrease cash flowsDecrease net income, decrease cash flowsIncrease net income, no effect on cash flows
In a statement of cash flow a net income is a credit, which should always be the same amout of cash in your balance sheet. (nice check)
Cash dividend paid has nothing to deal with net income as net income is calculated first and after that it is distributed. If cash dividend is received then it is included in net income calculations and increases the net income.
Net income included the non cash items as well while in net cash from operations only cash items are included and net income is adjusted for non cash items.
cash is not net income,it is part of wealth and can be used further in earning profit.
Net cash flow and net profit is not same due to inclusion of non cash items in net income that's why net income is adjusted for non cash items while preparing cash flow from operating activities.
19. What effect will the declaration and distribution of a stock dividend have on net income and cash flows? (Points : 2)No effect on net income or cash flowsNo effect on net income, decrease cash flowsDecrease net income, decrease cash flowsIncrease net income, no effect on cash flows
In a statement of cash flow a net income is a credit, which should always be the same amout of cash in your balance sheet. (nice check)
Cash dividend paid has nothing to deal with net income as net income is calculated first and after that it is distributed. If cash dividend is received then it is included in net income calculations and increases the net income.
Net income included the non cash items as well while in net cash from operations only cash items are included and net income is adjusted for non cash items.
cash is not net income,it is part of wealth and can be used further in earning profit.
Net cash provided by operating activities can be find out by adjusting the net income amount from income statement for non-cash items.
Net cash flow is the difference between income and expenditure.
If you look at a statement of cash flows, you will see the reconciling items. For example, cash is reduced when you purchase capital assets or pay off a debt - these are not expenses. Collection of receivables increases cash but the income was recognized in an earlier period. There are also non-cash items on the income statement, such as depreciation - that is an expense without reduction of cash.
Depreciation Expense reduces net income and has no effect on cash flow.
Yes, cash flow can be positive while net income is negative.
An individual's net income is used to determine how much income tax is owed. ... cash flows from operating activities ...