Major differences between the income statement and the cash flow statement include all of the following except for A)the income statement measures cash position. B)the income statement does not capture many creditor transactions. C)the income statement is prepared on an accrual basis. D)the income statement captures mainly operating activities.

Question

Quizplus · Accepted Answer

The income statement does not directly measure cash position but rather reports on revenue and expenses incurred during a specific period. The cash flow statement, on the other hand, provides information on changes in cash and cash equivalents during a period by identifying the sources and uses of cash. The other options listed -B, C, and D- are all correct differences between the two statements.

Major Differences Between the Income Statement and the Cash Flow