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VICAccountingQuick questions
Unit 3: Financial accounting for a trading business
Quick questions on The distinction between cash and profit (VCE Accounting Unit 3)
2short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What are add back non-cash expenses?Show answer
Depreciation 8,000 reduced profit but used no cash, so add it back: 30,000 + 8,000 = 38,000.
What is net operating cash flow?Show answer
Net cash flow from operations = 33,000 dollars, compared with a net profit of 30,000. The business actually generated 3,000 more cash than profit this period, largely because depreciation is a non-cash expense, despite tying up cash in receivables and inventory.
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