38. a corporation’s income statement reported net income of $90,000. the corporation’s scf reported net cash…

38. a corporation’s income statement reported net income of $90,000. the corporation’s scf reported net cash provided by operating activities (ncpoa) of $125,000. which of the following would cause the ncpoa to be greater than the net income? select... a decrease in accounts payable an increase in accounts receivable the gain on the sale of an asset used in the business depreciation expense

38. a corporation’s income statement reported net income of $90,000. the corporation’s scf reported net cash provided by operating activities (ncpoa) of $125,000. which of the following would cause the ncpoa to be greater than the net income? select... a decrease in accounts payable an increase in accounts receivable the gain on the sale of an asset used in the business depreciation expense

Answer

Explanation:

Step1: Analyze impact of accounts payable decrease

A decrease in accounts payable means cash is used to pay off debts. It reduces net - cash provided by operating activities and makes it less likely for NCPOA to be greater than net income.

Step2: Analyze impact of accounts receivable increase

An increase in accounts receivable means sales are made but cash is not yet received. It reduces net - cash provided by operating activities and makes it less likely for NCPOA to be greater than net income.

Step3: Analyze impact of asset sale gain

A gain on the sale of an asset is included in net income but is a non - operating activity. It increases net income but not operating cash flow directly. So it doesn't cause NCPOA to be greater than net income.

Step4: Analyze impact of depreciation expense

Depreciation is a non - cash expense. It is deducted in calculating net income but added back in the operating activities section of the cash flow statement (when using the indirect method). This increases net cash provided by operating activities while not affecting cash outflows. So depreciation expense can cause NCPOA to be greater than net income.

Answer:

Depreciation expense