Which Statement Best Describes How the Cash Flow Statement Differs

question 44

Multiple Choice

Which statement best describes how the cash flow statement differs from the income statement?

• A) The income statement records sales and expenses when they happen, not when cash is actually exchanged. The cash flow statement records cash inflows and outflows when they actually occur.
• B) The income statement records income, as it comes in, while the cash flow statement records cash from sales.
• C) The income statement keeps track of cash when sales are made; the cash flow statement keeps track of cash after sales are made.
• D) All of the above
• E) None of the above

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Definitions:

Intelligence

A general mental capability that involves the ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly, and learn from experience.

Semanticity

The quality of language that allows it to convey meaning through the use of symbols with agreed-upon interpretations.

Instinct

An innate, typically fixed pattern of behavior in animals that is responsive to specific stimuli and critical for survival.

Memory

The processes by which information is encoded, stored, and retrieved.