Chapter 13, Problem 9P

To determine

Income Statement: The statement in which the profit or the loss of a company is mentioned is called income statement. In the income statement particulars such as revenues, expenses, net income and profit or loss are mentioned. It is also a statement which gives us the effect of expenses and profit in a stipulated time period.

Cash flow statement: The statement which summarizes the net amount of cash disbursed and received with regards to a particular activity is called cash flow statement.

Determine and explain the rationale and the difference between an Income statement and a Cash Flow statement.