Q24.  Assume U.S. GAAP (generally accepted accounting principles) applies unless Otherwise noted. A company reported net income of $130 million and cash flow from operations of $100 million. The most likely explanation for net income being larger than cash flow from operations is that the company ;

A. realized a loss on long-term investments sold during the year.

B. Purchased new property, plant, and equipment at the beginning of the year

C. Reduced its purchasing activity and inventory levels because of lower demand for its products.

D. Took advantage of substantial trade discounts, lowering the balance in accounts payable during the year.

答案详解如下：

Q24.  D    Study Session 7-35-v, 7-36-n

An increase in net working capital investment because of the lower balance in accounts payable would reduce cash flow from operations relative to net income

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