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?
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    "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.
    • "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."

      That makes sense, but then why does the _401EmployerContrib show up as a net cash inflow?  It was never in any of my cash accounts either.  It went straight from my employer's bank account to my 401k account.
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    " ... but then why does the _401EmployerContrib show up as a net cash inflow?"

    Maybe so we'll have something odd to contemplate. :)

    Here's my take.

    The category "_401Employercontrib" is to record an offset to the employer-match transfer to your 401k (so your paycheck gross and net amounts aren't affected by the amount of the employer match).

    [You can see all the split lines in a paycheck using the Banking | Transaction report Customized to "Show splits".]

    You're wealthier by the amount of the employer match ... but it didn't come out of your pay. The funds that went from your gross pay to your 401k caused a net wealth effect of zero (since your net pay is already accounted for in the Quicken deposit account). But your additional net worth created by the employer match is not reflected in your gross or net salary.

    The amount of your 401k contribution would have increased your net pay had you not elected to make 401k contributions. But your employer match contribution would not have existed at all, had you not elected to make 401k contributions. The employer match contribution is a "different animal" than the employee contribution.

    [The Cash Flow report excludes all Quicken transfers by default; but you can Customize the report to display them (I would still exclude "internal transfers"). If you do that, you'll see both the transfers TO the 401k account and the transfers FROM the paycheck deposit account. The transfers involving the 401k account should net to zero.]
    • NoWayJose - Thanks, that makes sense.  In your post, you said:

      "[The Cash Flow report excludes all Quicken transfers by default; but you can Customize the report to display them (I would still exclude "internal transfers"). If you do that, you'll see both the transfers TO the 401k account and the transfers FROM the paycheck deposit account. The transfers involving the 401k account should net to zero.]"

      I did that and now I see 2 new transactions.  One is labeled "FROM Checking" and the other is labeled "TO 401k".  The two amounts are equal and both equal the sum total of my 401k contributions plus my employer matches.  I understand why the two numbers are equal (they have to net out to 0 because there was no net gain or loss of cash here), but why is the first transaction labeled "FROM Checking"?  The money that ended up in my 401k was never in my checking account, as we established in your previous post.  It really wasn't transferred FROM my checking account.

      Also I noticed that taxes are considered a "cash outflow" even though that money was never in my checking account to begin with either.  I just need to get used to their classification I guess.
    • "why is the first transaction labeled "FROM Checking"?"

      No other place to put it?

      As you've noticed, you can alter reports (and the Cash Flow report, in particular) to display more, or less, information than Quicken displays for a default. The meaning of the altered results will often be left to you to determine.
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