What Is the Difference Between a Profit (Net Income After

question 113

Essay

What is the difference between a profit (net income after taxes) on an income statement and the cash balance reflected at the bottom of the statement of cash flows?

---

Definitions:

Accounts Payable

Short-term obligations or debts a company owes to its suppliers or creditors.

Note Payable

A written promise to pay a specific amount of money, often bearing interest, at a future date or on demand.

Liquidated

The process of closing a business by selling off assets to pay creditors and distributing any remaining assets to the owners or shareholders.

Involuntary Bankruptcy

A legal process initiated by creditors seeking to collect debts from a company or individual that cannot pay its obligations.