diff b/w cf & ff
This query is : Resolved
23 February 2011
plz tell the difference between cash flow statement & fund flow Statement
23 February 2011
A distinction between these two statements may be briefed as under:-
(i) Funds 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.
(ii) 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.
(iii) Funds flow shows an increase in a current liability or decrease in current assets as decrease in working capital and vice versa whereas Cash flow shows an increase in current liability or decrease in current asset as increase in cash and vice versa
(iv) Cash Flow Statement is started with the opening cash balance and closed with the closing cash balance while there a no opening or closing balances in Funds Flow Statement.
(v) Funds flow is useful for long term financial planning whereas Cash flow is useful for short term financial planning.
http://www.universalteacher4u.com/cbse/xii/acctheory/ch12/page1.htm
Please also see above link.
(i) Funds 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.
(ii) 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.
(iii) Funds flow shows an increase in a current liability or decrease in current assets as decrease in working capital and vice versa whereas Cash flow shows an increase in current liability or decrease in current asset as increase in cash and vice versa
(iv) Cash Flow Statement is started with the opening cash balance and closed with the closing cash balance while there a no opening or closing balances in Funds Flow Statement.
(v) Funds flow is useful for long term financial planning whereas Cash flow is useful for short term financial planning.
http://www.universalteacher4u.com/cbse/xii/acctheory/ch12/page1.htm
Please also see above link.
23 February 2011
sir
can u give some example of items constituting funds (Working Capital)
plz help
can u give some example of items constituting funds (Working Capital)
plz help
23 February 2011
The most common definitions of working capital are:
* current assets - current liabilities
* stocks + trade debtors - trade creditors
* current assets - current liabilities
* stocks + trade debtors - trade creditors
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23 February 2011
sir
if there is change in stock, debtors or creditors then they also effect cash flow statement.also?
plz tell the item which we consider in fund flow statement but not in cash flow statement.
if there is change in stock, debtors or creditors then they also effect cash flow statement.also?
plz tell the item which we consider in fund flow statement but not in cash flow statement.
24 February 2011
CMA Sanjay Guptas reply dated 23/02/2011 point no. iii needs clarification
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24 February 2011
Ashok ji thanks for noticing the inadvertant mistake the same has been modified.
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