The income statement shows the difference between a firm's income and its costs-i.e. ,its profits-during a specified period of time.However,not all reported income comes in the form of cash,and reported costs likewise may not be consistent with cash outlays.Therefore,there may be a substantial difference between a firm's reported profits and its actual cash flow for the same period.

Question

Quizplus · Accepted Answer

The statement accurately describes the concept of cash flow versus reported profits on the income statement.

The Income Statement Shows the Difference Between a Firm's Income