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Categories >> Accounting >> Accounting AllOther
 
 


 

 
 Audit interview questions  Audit Interview Questions (428)
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 Accounting General interview questions  Accounting General Interview Questions (2844)
 Accounting AllOther interview questions  Accounting AllOther Interview Questions (4376)
Question
what is cash flow and funds flow? Difference between cash 
and funds flow? methods of cash flow
 Question Submitted By :: Accounting-AllOther
I also faced this Question!!     Answer Posted By  
 
Answer
# 1
Cash Flow Statement : Statement showing changes in inflow &
outflow of cash during the period.

Methods of cash flow:1.Direct Method : presenting
information in:Statement of A. operating Activities, B.
Investment Activities C.Financial Activities
2.Indirect Method :uses net income as base & make
adjustments to that income(cash & non-cash)transactions.

Funds Flow Statement :Statement showing the sorce &
application of funds during the period.
Major Difference:

The CFS allows investors to understand how a company's
operations are running, where its money is coming from, and
how it is being spent.

FFS is showing the fund for the future activites of the
Company.

CMA Kiran
 
Is This Answer Correct ?    746 Yes 109 No
Cma Kiran Kumar K.v.
 
Answer
# 2
Cash flow simply means a factual presentation of cash
inflows and outflows.This will give a clear picture of cash
and cash equivalents movement during a period of time. On
the other side fund flow is broader term which never
confine to cash movemnts only but this will show the
sources & application of funds and its movements over a
period of time.The major key aspect of fund flow is its
working capital presentation.Business operations can
easily be analysed through pointing out the movements of
working capital.The key decisions of management which
affect capital structure can be planned by utilising data
presented in fund flow statement through making a
comparison of working and fixed capital which will enable
progessive growth in prospective environment.
 
Is This Answer Correct ?    180 Yes 23 No
Titus-chartered Accountant.
 
 
 
Answer
# 3
Cash flow is the inflow & outflow of cash during an
accounting period.

fund flow statment is a report which explains the movement
of funds, during an accounting period.

difference:

shows the causes of changes in net working capital. there
are no opening or closing balances. deals with all
components of working capital.

shows the causes for the changes in cash.started with the
opening and closing balances of cash. deals only with cash.

methods:

operating activities.
investing activities.
financing activities.
 
Is This Answer Correct ?    162 Yes 71 No
Vinotha.v
 
Answer
# 4
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 statement is started with the opening cash
balance and closed with the closing cash balance records
only cash transactions.

(iv) 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



Cash Flow Statement : Statement showing changes in inflow &
outflow of cash during the period.

Methods of cash flow:
1.Direct Method : presenting information in Statement of
A. operating Activities
B. Investment Activities
C.Financial Activities

2.Indirect Method :uses net income as base & make
adjustments to that income(cash & non-cash)transactions.

Funds Flow Statement :Statement showing the source &
application of funds during the period.

Major Difference:

The Cash Flow S tatement allows investors to understand how
a company's operations are running, where its money is
coming from, and how it is being spent.

Fund Flow Statement is showing the fund for the future
activites of the Company
 
Is This Answer Correct ?    80 Yes 4 No
Vinay
 
Answer
# 5
Cash flow statement shows the actual cash flow of a
company. This summarrise the data of cash or cash related
activities only.

funds flow statements shows that where the funds have been
generated & where they have been utilised. thus funds means
current assets & currents liabilities of a company.If
current assets are more that current liabilities that
working capital of a company willbe increased & if current
liabilities are more that current Assets it will be
decrease.thus fund flow shows the reason of change in
working capital.

this is a statement of sources & uses of application of
funds.the sources are funds from operation,sale of fixed
assets,issue of share capital & debenture,non operating
receipts. Uses are purchase of fixed assets,redemption of
prefence shares & Debentures,Loss on sale of fixed
assets,loss from operations etc.
 
Is This Answer Correct ?    84 Yes 10 No
Rajesh Jain
 
Answer
# 6
cash flow statement is a statement of changes in csah
position.it is a prepare on cash basis,in other hand it is
a statement of inflow outflow cash during specipic
period,fund means net working capital.nwc=c.a-c.l,fund flow
statement is a statement of changes in financial
position,it is prepare on working capital.
methods
statement
t-form,account form
 
Is This Answer Correct ?    108 Yes 44 No
Ramana Mfm
 
Answer
# 7
1) Cash flow is a statement which shows cash inflow and
outflow of cash during a particular period of time. Where
as funds flow is a statement which shows inflow and outflow
of funds.

2) Cash flow shows the liquidity of the company, where as
funds flow shows how the company can invest in future.
 
Is This Answer Correct ?    73 Yes 29 No
Ujji Ravi Kumar
 
Answer
# 8
CASH FLOW STATEMENT: It is a statement which depicts the
change in the cash position (i.e cash and bank balance) of
a concern between one balance sheet and another.


FUND FLOW STATEMENT: It is a statement which shows how the
net working fund or working capital is obtained and how it
is put to use.

DIFFERENCES BETWEEN CASH FLOW STATEMENT AND FUND FLOW
STATEMENT ARE AS FOLLOWS:

1.Cash Flow statement is based on cash concept of fund
whereas Fund Flow statement is based on working capital
concept of fund.

2.Cash Flow statement depicts the changes in the cash
position of an enterprise between two balance sheet periods
whereas Fund Flow statement depicts the changes in the
working capital position of an enterprise between two
balance sheet periods.

3.Cash Flow statement deals with the inflow and outflow of
only cash, which is just one of the items of working
capital whereas Fund Flow statement deals with all the
items of working capital.

4.Cash Flow statement is only a supplementary statement
whereas Fund Flow statement is a main statement.

5.Cash Flow statement starts with the opening cash balance
and ends with closing cash balance whereas Fund Flow
statement does not start with any opening balance and does
not end with any closing balance.
 
Is This Answer Correct ?    35 Yes 2 No
Vibha
 
Answer
# 9
Cash flow stayement is preapred on regular basis which
gives the details of cash receipts and expenses i.e.,
payments incurred on daily basis to run the busines.

Funds flow statment is preapred on monthly basis which a
broad idea to the management the sorce and quatum of funds
put to used in business and the funds invested.

the difference between the both statement is Cash flow
statement will give idea about the expenses need on day to
day basis and Funds flow statement give the managment how
healthy is the business going.
 
Is This Answer Correct ?    32 Yes 5 No
T. Srinivas
 
Answer
# 10
i am asking diffrece bitween cash and fund. 
Is This Answer Correct ?    74 Yes 48 No
Harinath
 

 
 
 
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