Suppose a company generally records revenues and expenses before receiving or making cash payments. Which of the following statements is not correct?
A. Net income and net cash flows provided by operating activities will always agree.
B. If revenues are rising, net income could result even though the company reports a net cash outflow from operating activities.
C. If revenues are falling, a net loss could result even though the company reports a net cash inflow from operating activities.
D. The income statement doesn't explain changes in cash because it focuses on just the operating results of the business.
Answer: A
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