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Explain the Difference between cash and profit
Cash flow statement shows all the cash in and cash out for the organisation for that period. It demonstrates the cash generating ability of the organisation. Income statement on the other hand shows profitability of the business during that period. Income statement is prepared using the accruals concept. This is where revenue and expenses are recognised in the period that they are incurred and not in the period the cash is received or paid. That's why you have a difference between profit andcash.
Q. Explain about Types of costs? Thus two types of costs are involved in keeping cash balance in a business- (i) Opportunity Cost (ii) Transaction Cost When cash balan
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It's a small amount of money which is used for initial market research or product development for a new venture.
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