What's the difference between a cash flow statement and an income statement?
submitted by Don Gold
A cash flow statement shows the actual income and expenses made. An income statement includes income and expenses that will be made in the future.
A cash flow statement records a business' financial position like earnings and disposals/sale of the asset. An income statement records all income and expenses to know how much profit or loss the firm made.
Cash flow tracks cash income and outgo, what was received and what was spent, independent of what was earned and what is owed. An Income Statement tracks earned income and expenses owed, whether paid or not, plus non-cash expenses such as depreciation and amortization.
Cash flow statement deals with inflow and the outflow of money in the business.
Cash Flow Statement reports the impact of a firm's asctivities on cash flows over a given period of time.
Income statement indicates the financial position of the business, meaning the status of revenue made and or loss made. Meanwhile ,cashflow statement indicates actual financial in and out flow in the business. This is irrespective of revenue or loss.
According to my opinion, the difference between the income statement and cash flow statement is: The income statement tells the net amount of company's income for a time period, whether its earned yet or not. It also includes other factors effecting income. A cash flow statement includes all transactions of cash, including income and outflow of cash, whether its related to income or not.
Cash flow gives originality in business while income statement gives assumptions with future considerations.
In light of the definitions given, we can say that cash flow deals with all aspects of the business while income statements only deal with revenue and business expenses.
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