What is the main difference between profit and cash flow?
Answer and explanation
Correct answer: लाभ आय और खर्च का अंतर है, जबकि नकदी प्रवाह धन के आने-जाने को दिखाता है
Profit is an accounting measure showing whether revenue exceeds the relevant expenses during a period. Cash flow tracks actual inflows and outflows of cash and their timing. A business may report profit while cash is tied up in credit sales or inventory, so it can still face a short-term cash shortage. Therefore, profit and cash flow are related but not identical.
Frequently asked questions
What is the correct answer to this question?
लाभ आय और खर्च का अंतर है, जबकि नकदी प्रवाह धन के आने-जाने को दिखाता है
Why is this the correct answer?
Profit is an accounting measure showing whether revenue exceeds the relevant expenses during a period. Cash flow tracks actual inflows and outflows of cash and their timing. A business may report profit while cash is tied up in credit sales or inventory, so it can still face a short-term cash shortage. Therefore, profit and cash flow are related but not identical.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Sources of Business Finance. Topic: Concept, nature and importance of business finance.
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