The income statement reports the operating performance of the firm over some period of time. Identify all the reasons why it does not reflect actual cash flow the firm generates. Select all answers that apply.

-1- Non-cash items distort the bottom line.

-2- Changes to corporate tax law

-3- A firm's dividend policy

-4- Accounting rules (GAAP) recognize revenues and expenses when the transaction occurs; not necessarily when the cash is paid