Chapter 12, Problem 10DQ

To determine

Cash Flow Statement:

Cash flow statement is that statement in which, transaction related to cash are recorded. It is mandatory report and included in the financial statement of the company. It is divided into three parts operating activities, investing activity, and financial activity

Operating Activity:

Operating activity is the first part of the cash flow statement. The main focus of the operating activity is on the cash inflow and outflow from selling the goods, providing the services and manufacturing. Long term capital and investing cost are not included in the operating activity.

To identify: Whether a company can show net cash outflow from operating activities despite of net income.