Accounting Week 4 Discussion Questions
#2
Your friend comments, “I just ignore the income statement when I’m making an investment decision. All I care about is the cash, so that the company can pay me dividends. The balance sheet tells me about the cash the company’s got; the cash flow statement tells me about its changes in cash. Who cares about the income statement? It’s just a bunch of inaccurate stuff loaded with estimates.” Do you agree with your friend’s remarks about the income statement and its lack of importance? Explain why or why not.
