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

Question

Quizplus · Accepted Answer

The statement of cash flows explains the changes in a company's cash balance for a period, including how net income is adjusted for non-cash items and changes in working capital accounts. The income statement shows the company's revenues and expenses for the period, but does not explain the changes in cash. The balance sheet and statement of owner's equity provide information about a company's assets and liabilities, but do not provide details about the changes in cash during the period.

The Explanation of Why the Net Income Differs from Change