Which of the following does a discrepancy in cash flow reconciliation indicate?
A) The cash outflow is greater than the cash inflow.
B) The cash flow statement reflects entries for intercompany cash flows and transactions.
C) Certain cash transactions are not accurately reflected in the income statement and balance sheet.
D) There was an unexpected surge of cash flow during the period.

Question

Quizplus · Accepted Answer

A discrepancy in cash flow reconciliation indicates that certain cash transactions are not accurately reflected in the income statement and balance sheet. This could be due to errors in recording transactions, timing differences, or other discrepancies. Option A is not necessarily true as a discrepancy could mean that cash inflow is greater than cash outflow. Option B could be a factor in reconciling cash flows but not necessarily the cause of a discrepancy. Option D is not relevant to a discrepancy and may actually complicate reconciliation efforts.

Which of the Following Does a Discrepancy in Cash Flow