Choose ONE (1) question below to discuss and then respond to TWO (2) of your classmates answers (Try not to repeat others answers). Include the question with your response.
- How do charity care and bad-debt differ in both definition and how they are treated on financial statements? Explain.
- What is the difference between net income and cash flow? In your discussion, include a discussion of what financial statements are used to report these measures.
- What are the three types of revenue on an income statement? Explain each.
- What is a non-cash expense? Provide some examples. What financial statement are non-cash expenses recorded on?
- What is financial accounting? How does it differ from managerial accounting?
Make sure you are properly citing your source(s) and providing your reference(s) for information you obtain from another source. Please review the Discussion Expectations and Grading posting if you have any questions regarding answering the discussion question and/or responding to your peers.
SOLUTION
- What is the difference between net income and cash flow? Include in your discussion the financial statements used to report these measures.
Net income and cash flow are two of the most important figures that have different roles to play when measuring the financial state of an enterprise. Net income is the amount a business has earned after all its expenses, taxes, interest, depreciation, and many more have been deducted from its turnover. According to L-W Consulting (2024), this can also be called the ”bottom line” because it shows the monetary value of the company’s profit during a period. Net income is disclosed on the income statement and is popularly referred to as the profit and loss account, which captures revenue, expenditure, and profit.
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