difference between cash flow and income vs. expense

I'm not clear on the difference between a Cash Flow report and an Income/Expense by Category report (with graph).  If I generate an Income/Expense by Category report and graph for a particular month, it shows my gross salary as income, and a _401kEmployerContrib (aka 401k match) as income.  That makes sense to me.

Then under the "EXPENSES" section of the Income/Expense by Category report, it shows a "TO 401k" entry that equals the sum of my 401k contributions plus my employer match.  This also makes sense to me - I had this money as income initially, then I "spent" it on my 401k account.

Contrast this with the Cash Flow report for the same month.  Under "INFLOWS" I again see _401kEmployerContrib, and the amount matches the amount found in the Income/Expense by Category report.  Under "OUTFLOWS", I no longer see any transfer to my 401k account, however.  Why not?  Why is a transfer of cash to my 401k account not considered an "outflow"?

If I go to Customize->Advanced->Transfers->Include All in the Cash Flow report, then 2 new transactions appear in the report:  under Salary I now see a "FROM Checking" entry that equals the sum total of my 401k contribution plus the employer match, and a "TO 401k" entry under OUTFLOWS that equals the same amount.  There is no net change in my OVERALL TOTAL line.  Why is this?  Why does my 401k contribution count as an expense in the Income/Expense by Category report, but not a cash outflow in the Cash Flow report?  Why does the employer match count as a cash inflow, but not an outflow?  In general, when should I use the Income/Expense report, and when I should I use the Cash Flow report?


"Why is a transfer of cash to my 401k account not considered an 'outflow'?"

Because that "cash" was never in the account where you deposited your paycheck. The "cash flow" for your 401(k) contributions went FROM your *employer's* payroll bank account TO your 401(k) account.

Use the Income/Expense report to keep track of income and expenses. Use the Cash Flow report ("organized" by Cash Flow) to track your cash flow.

Example: you put a charge on your credit card in June, but you pay the credit card bill that includes that charge in July. Considering just that transaction: that's an expense in June and a cash flow in July.
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NoWayJose , Q2014 RPM
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