what is cash flow and funds flow? Difference between cash
and funds flow? methods of cash flow

Answer Posted / shiva kumar

We have fully explained the meaning and importance of both
the statements-Funds Flow an Cash Flow statements.





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.

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