Question: PepsiCo, Inc. (PEP) is a food and beverage company with a variety of brands, including Frito-Lay, Gatorade, Pepsi-Cola, and Tropicana. On recent financial statements, Pepsi reported net income of $7,679 million and $2,710 million of depreciation expense. If Pepsi had used the cash basis of accounting, its net income would be approximately $11,616 million. Why would Pepsi's net income be higher if it had used the cash basis?