accounting questions

Why is it necessary to convert accrual-based net income to cash-basis income when preparing a statement of cash flows?The president of Ferneti Company is puzzled. During the last year, the company experienced a net loss of $800,000, yet its cash increased $300,000 during the same period of time. Explain to the president how this could occur.

this is an discussion question for today and i need help with it for my accounting class.

 
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