Chapter 11, Problem 63.4C

To determine

The contrast between net income and net cash flow. Net income is the incomes perceived in an announcing period, less the costs perceived in a similar period.

Net cash flow is determined by deciding changes in closure cash adjusts from period to period, and isn’t affected by the accrual basis of bookkeeping.

To discuss:

Does the bank use net income in this way rather than simply predicting future cash flow by reference to past cash flows?