Hat Trick Manufacturing reported a net income that was 20% smaller than the reported net cash flow from operations. What is the best explanation?
A) Hat Trick Manufacturing did not apply the full disclosure principle.
B) Hat Trick Manufacturing had items, such as depreciation and amortization, that reduced net income but did not affect cash flows.
C) Hat Trick Manufacturing is in financial distress and approaching bankruptcy.
D) Hat Trick Manufacturing made a mistake in the preparation of the statement of cash flows or in the income statement.