Question
In comparing accounting net income and operating cash flow, name two items you typically find in net income that are not in operating cash flow. Explain what each is and why it is excluded in operating cash flow.
Step 1
Non-cash expenses: Non-cash expenses are expenses that are recorded in the income statement but do not involve an actual outflow of cash. Examples of non-cash expenses include depreciation and amortization. These expenses are excluded from operating cash flow Show more…
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Distinguish between operating income and net income.
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