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You could sell merchandise and make a profit. If the customer has not paid you yet, you have not increased cash. You have increased accounts receivable.

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16y ago

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What is the difference between cash accounting profit and loss and accrual accounting profit and loss?

Cash accounting and accrual accounting are two methods of accounting in cash accounting system all expenses and revenues are recorded when actual cash is paid or received while in accrual profit and loss statement, revenues and expenses are recorded when they are actually occurred and timing of receipt and payment of cash is not important.


Is economic profit equal to accounting profit?

no


How do you prove cash in accounting?

to prove cash you look at the amount of money you have and accounting books. if the value is equal then you have proved cash


How do you prove cash accounting?

to prove cash you look at the amount of money you have and accounting books. if the value is equal then you have proved cash


What causes the net profit for the year note to equal the net cash inflow?

Net profit refers to the book profits made by an enterprise after accounting all incomes & expenses. This includes both cash & non - cash items like depreciation which does not involve any cash outflow. Net cash inflow refers to the actual cash received by the enterprise during the year. The only cause that net profit will equal the net cash inflow is if the Profit & loss account records only the receipts during the year & excludes all expenses both cash & non-cash.


What managerial assessments may you make about an organization that has a profit and negative cash flow in the same accounting period?

What managerial assessments may you make about an organization that has a profit and negative cash flow in the same accounting period?


Why the increase or decrease in cash is different to the profit or loss?

Cash does not equal profit. For example, a depreciation charge is a cost to the business, but no actual cash is expensed.


Why is profit not always cash in accounting?

WHY IS PROFIT NOT ALWAYS CASH Profit is the excess of turnover over cost and expenses. Profit is not cash always because a company can have its financial statements to be exhibiting large amount as profit whiles it has nothing in its pocket. Cash on the other hand, is called a reality by me. It is a language which a small boy or girl understands unlike profit. Profit most of the time come about through the application of accounting concepts and tools. Because of this, an account prepared in Ghana which uses the IFRS will be different from the profit figure computed in India which uses the India GAAP.


Why Diffrance between cash flow and accounting profit?

Cash flow by definition looks at the flow of cash either inwards or outwards. However, financial statement accounting considers cash flows as well as non-cash items like depreciation, amortization of goodwill, capital write offs, bad debts, provisions, discounts & rebates, etc. The non-cash transactions affect the accounting profit while does not have any impact on the cash flow statements.Hope this helps!


Does sales made on credit cause accounting profit and cash flow to differ?

Yes, because due to sales on credit sales are accounted for when they are occurred while cash is received in some future time that;s why accounting profit and cash flows differ due to recognition timing difference.


Is profit equal to the amount of cash collected by an entity?

No, profit often includes cash, but it rarely the entire quantity. Profit is usually the combination of liquid and non-liquid funds.


What managerial assessments can you make about a company that has a profit and a negative cash flow in the same accounting period?

There are many managerial assessments you could make about a company that has a profit and a negative cash flow in the same accounting period. You could say that there is an error or that temperature changed dramatically for example.