Required information The following information applies to the questions displayed below! The beginning account balances for Terry's Auto Shop as of January 1, Year 2. follow Account Titles Beginning Balances Cash $6, 110 Inventory 3,190 Common Stark 7,220 Hetained Earnings 1,90 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4.200 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $245 cash 3. Returned $455 of damaged merchandise for credit on account 4. Agreed to keep other damaged merchandise for which the company received a $270 allowance 5. Sold merchandise that cost $2 660 for 54.810 cash 6. Delivered merchandise to customers in Event 5 under terms FOR destination with freight costs amounting to $150 cash. 7. Paid $2.820 on the merchandise purchased in Event 1 c. Why does a difference exist between net income and net cash flow from operating activities? Murple Choke The difference between come and ret cash flow from operating activities exists because the shop is not selling all the vertory that it putihased during the period The difference beweer net income and net cash flow from operating the exists because operating capenses are not recurred be to accounted for when the income The difference between net income and net cash flow from anotrocis exists because of moting the very incords.corpetual Inventory system