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A cash flow statement can be more useful than a funds flow statement- Discuss?
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The statement of cash flows may also be called the?
funds statement
Cash flow statement may also be called?
funds statement
Is cash a source or use of funds?
Answer:Cash is funds. When activities generate cash, it is said these activities are a source of funds. And, if the activities use up cash, it is a use of funds. Note: in the 'Funds flow statement', working capital is used as a measure of funds, which is a broader definition of funds than cash. For example, working capital increases when inventory increases, but cash would remain unchanged.
What defference between cash flow and funds flow ststement?
A distinction between these two statements may be briefed asFunds Flow Statement is concerned with all items constituting funds (Working Capital)for the business while Cash Flow Statement deals only with cash transactions. In other words, a transaction affecting working capital other than cash will affect Funds statement, and not the Cash Flow Statement.In Funds Flow Statement, net increase or decrease in working capital is recorded while in Cash Flow Statement, individual item involving cash is taken into account.Funds Flow statement is started with the opening cash balance and closed with the closing cash balance records only cash transactions.Cash Flow Statement is started with the opening cash balance and closed with ht closing cash balance while there a no opening or closing balances in Funds Flow Statement.
Why funds flow statement prepared?
A funds flow statement compares a company's actual cash flow with its predicted cash flow. This allows a company to examine the factors that may have caused a failure to meet goals.
What is statement of cash flows and what types of question does it answers?
it explains SOURCES of funds and where in the balance sheet the funds were USED
How cash flows provides useful information that goes bayond income statment and balance sheet?
Type your answer here... A statement of cash flow shows the actual cash position of a firm. The income statement and the balanced sheet are based on the accrual method and record revenues and expenses as they occur and not when cash changes hands. Thus funds depicted on these statements might not be available to the firm at that time.
Why the statement of cash flows provides useful information that goes beyond income statement and balance sheet data?
statement of cash flows provides useful information that goes beyond income statement and balance sheet data because provides information to security analysts and stockholders
Is cash flow the same as income?
No a Profit & Loss statement will tell you net imcone, which is not the same as cash flow. Cash Flow is the result of a sources and uses of funds statement which is often a better indication of how a buisness is performning that the P&L.
How does depreciation affect cash flow statement?
Depreciation does not effect cash flow statement as depreciation is not a cash expense rather it is just a treatement to dispose off the value of asset according to useful life of asset and the cost of asset is already shown in cash flow statement when asset is purchased.
Distinguish between fund flow statement and cash flow statement?
Cash book just shows the cash receipt and cash payment without distinguishing for which purpose cash is paying out while in cash flow statement difference is shown to determine that cash is coming or going out from which activity.
To whom is the statement of cash flow useful?
Auditors, accountants, investors, management, business owners.
