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.

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Chapter 15, Problem 9P

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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.

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