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1. Current assets and fixed assets, current assets and capital,
current assets and fixed liabilities, current liabilities and fixed
liabilities, current liabilities and capital, current liabilities and fixed
assets

2. 
Just like heart pumping blood to other parts of the
body in a human body system, the fund – mean to
include cash and cash equivalents in an
organisation – takes care of the operations of the
organisation.

3. Fund means cash or cash equivalents or to mean
a working capital

4. Behind the balance sheet information
 Capital as well as revenue nature


5. Unbalance in liquid position of the business
 Possibility of dividend distribution despite net loss
 Profit position in the organisation


6. To add items which do not result in outflow of
funds
 To deduct items which do not increase funds


Non-operating items treatment in Fund Flow
Statement

7. Schedule of changes in working capital
 Increase in current asset and decrease in current
liability = increase in working capital
 Decrease in current asset and increase in current
liability = decrease in working capital


8. Fund flow statement:
 Source of Funds:
 Application of funds:


9. Provision for taxation and proposed dividends:
 Method 1: (a) as a current liability
 Method 2: (b) as appropriation of profit


10. Is it a source of fund?
 Closing inventory includes depreciation as an
element of cost
 Saves funds
 Reduced taxable income


11. Equity accounts payable – creditors
 Notes payable
 Capital stock
 Retained earnings


12. 
To prepare concerned accounts in the light of
opening balance, closing balance, sale and
purchase of fixed assets

13. 
Preparation of Statement of Changes in the
Position –
Is obligatory in USA
 Accounting Standard-3 by ICAI
 Now AS 3 (Revised)


14. Cash flow from operating activities
 Cash flow from investing activities
 Cash flow from financing activities


15. 
When financial statements are invariably prepared
by an organisation, what is the need for the
preparation of a Fund Flow statement?

Is it a statutory obligation or what does the fund
flow statement bring out?

16. 
While the Trading account brings out either gross
profit or gross loss, the Profit & Loss account brings
out either net profit or net loss and the Balance Sheet
exhibits the true and fair view of the affairs of the
organisation on a particular date, the preparation of
Fund Flow Statement brings out the intricacies in an
organisational finance sourcing and application.

It is not a contradictory statement but it is a
complimentary statement.

17. RAJASEKAR G –
 Academic Counsellor, for MBA
 IGNOU Study Chapter,
 Chennai


18. Contact
suresh@mybskool.com
09962959381