Explain the difference between net income and cash flow.

Explain the difference between net income and cash flow.

• A. Net income is accounting profit; cash flow measures actual cash movements; they can diverge due to non-cash items and timing.
• B. Net income equals cash flow in all cases.
• C. Cash flow is the same as revenue.
• D. Net income is a measure of cash receipts from customers.

Answer: (A)