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Can someone let me know if my answer is correct For companies using the accrual method of accounting, why is there almost always a difference

image text in transcribedCan someone let me know if my answer is correct

For companies using the accrual method of accounting, why is there almost always a difference between a company's net profit for a certain period and its cash flow for that period? There are timing differences between cash receipts and disbursements and accrual accounting recognition of revenues and expenses. O Accrual accounting recognizes sales when cash is received and expenses when they are paid and cash flow matches expenses with the revenues they created. O Net profit and cash flow differ since cash flow takes net profit one step further and adds back non-cash expenses such as depreciation and amortization. There really is no difference. It's just that cash is what repays loans, so we refer to net profit as cash flow

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