Preparation of Fund Flow Statement

 

For preparing Fund Flow Statement

we have to prepare the following three statements:

 

(1) Schedule of Changes in Working Capital :– This schedule considers only

current assets and current liabilities, at the beginning and at the end of the year. This schedule shows either increase or decrease in working capital.

Cost ac fund flow 1 BCCA 2nd year

Cost ac fund flow 2 BCCA 2nd year

 

(2) Calculation of Funds from Operations :– In order to prepare a funds flow statement it is necessary to ascertain the sources and application of funds. Main source of fund in a business is funds from operations

Cost ac Fund flow 3 BCCA 2nd year

 

Fund Flow Statement :– Fund Flow Statement is prepared to show the changes in assets, liabilities and capital between the dates of two balance sheets. It discloses the causes of changes in the items of balance sheet between the end of the previous year and the end of current year. Thus, by preparing this statement, the management can find out the basic reasons for changes in the assets, liabilities and capital of the firm between two balance sheets

 

FORMAT OF FUND FLOW STATEMENT :–

Cost ac Fund Flow 4 BCCA 2nd year

 

 

 

 

 

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