Oscar Company is preparing its financial statements for the current year. Which of the following statements is correct?
I. A main difference between the income statement and the statement of cash flows is that the income statement is based on the accrual method of accounting and the statement of cash flows is based on the cash basis of accounting.
II. Depreciation is added back to net income in a direct method statement of cash flows because it is a source of cash.
III. Investing and financing activities that do not affect cash do not require disclosure in the financial statements.
IV. If a vendor allows a company to buy on credit, it is a use of cash to the buying company.
a. I only is correct.
b. I and II only are correct.
c. I and III only are correct.
d. I, II, III, and IV are correct.