Cash income minus cash expenses equals?

• A. Net cash income & cash profit
• B. Net income
• C. Gross income
• D. Operating cash flow

Answer: (A)

Cash income minus cash expenses shows how much cash the farm has earned after paying its operating costs in that period. This figure is called net cash income, also described as cash profit. It reflects actual cash left over and differs from net income, which uses accrual accounting and includes non-cash items like depreciation. Gross income is simply revenue before expenses, so it doesn’t measure profitability. Operating cash flow is a broader measure of cash generated by core operations, typically accounting for changes in working capital, not just a straightforward subtraction of receipts and expenses. For example, if cash receipts are 120,000 and cash expenses are 90,000, net cash income is 30,000.