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Decreases in current assets indicate lower net income compared to cash flows from (1) prepaid assets and (2) accrued revenues

Decreases in current assets indicate lower net income compared to cash flows from (1) prepaid assets and (2) accrued revenues For decreases in prepaid assets, using up these assets shifts these costs that were recorded as assets over to current period expenses that then reduce net income for the period. Cash was paid to obtain the prepaid asset in a prior period. Thus, cash from operating activities must be increased to reflect the fact that these expenses reduced net income on the income statem