Oscar Company is preparing its financial statements for the current year. Which of the following statements is

Question:

Oscar Company is preparing its for the current year. Which of the following statements is correct?
I. A main difference between the income statement and the statement of cash flows is that the income statement is based on the accrual method of accounting and the statement of cash flows is based on the cash basis of accounting.
II. Depreciation is added back to net income in a direct method statement of cash flows because it is a source of cash.
III. Investing and financing activities that do not affect cash do not require disclosure in the If a vendor allows a company to buy on credit, it is a use of cash to the buying company.
a. I only is correct.
b. I and II only are correct.
c. I and III only are correct.
d. I, II, III, and IV are correct.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...