4 art 4 of 4 Required information [The following information applies to the questions displayed below.) The trial balance for Terry's Auto Shop as of January 1 Year 2, follows: Account Titles Debit Credit Cash $14,810 Inventory 3,020 Common Stock $ 7,350 Retained Earnings 10,480 Total $17,830 $17,830 . aints 2 04.00.30 eBook Hint The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,280. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $230 cash. 3. Returned $440 of damaged merchandise for credit on account 4. Agreed to keep other damaged merchandise for which the company received an $275 allowance. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $125 cash. 7. Paid $2,810 on the merchandise purchased in Event 1. 8. Pald $8,720 cash for operating expenses. Ask Print d. Why does a difference exists between net income and net cash flow from operating activities. an d. Why does a difference exists between net income and net cash flow from operating activities. Multiple Choice The difference between net income and net cash flow from operating activities exists because operating expenses are not required be to accounted for when determining net income The difference between net income and net cash flow from operating activities exists because the shop is not selling all the inventory that it purchased during the period. The difference between net income and net cash flow from operating activities exists because of maintaining the inventory records using the perpetual inventory system