The Explanation of Why the Net Income Differs from Change

question 96

Multiple Choice

The explanation of why the net income differs from change in cash balance for the period is explained in which of the following statements?

• A) Income statement
• B) Balance sheet
• C) Statement of owner's equity
• D) Statement of cash flows

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Definitions:

Unearned Revenues

Income received by a company for goods or services yet to be delivered or performed.

Liability Uncertainty

Liability uncertainty involves not knowing the exact amount or timing of future outflows due to existing obligations.

Sales Taxes Payable

Current liabilities on a company’s balance sheet, representing taxes collected from customers on behalf of governmental authorities which are yet to be remitted.

Credited

An accounting entry that increases a liability or equity account, or decreases an asset or expense account.