QUESTION 17

What is the difference between the Income Statement and the Cash Flow Statement?

1. There is no difference. They both show cash coming in and out of the firm.
2. The Income Statement is for a single point in time and the Cash Flow Statement covers a specific period of time
3. The Income Statement shows accrual basis Net Income and the Cash Flow Statement shows why the cash balance on the Balance Sheet changed between two Balance Sheet dates.
4. All of the above
5. None of the above