What is a Balance Sheet?
A Balance sheet is a precise representation of the assets, equity and liabilities of the entity. This is outlined by every enterprise, a partnership enterprise or sole proprietorship firm. It reveals the financial security of the enterprise.
There are two titles in a Balance Sheet , namely – assets (inventory, accounts receivable), equity (share capital, capital surplus) and liability (accounts payable, bank loans). The liabilities title will cover the shareholder’s equity and all the current and non-current liabilities and all the current assets and the non-current assets of the enterprise are met whilst the equity.
What is a Cash Flow Statement?
A cash flow statement is a financial statement that presents total data concerning complete cash inflows a business gains from its continuing progress and external financing sources, as well as all cash outflows that pay for trading activities and finances during a delivered time. In other words, a cash flow statement is a financial statement that estimates the cash produced or used by a firm in a presented time.
This article is a ready reckoner for all the students to learn the Difference between Balance Sheet and Cash Flow Statement.
Comparison Table:
| Parameters | Balance Sheet | Cash Flow Statement |
| Meaning | A Balance sheet is a precise representation of the assets, liabilities, and equity of the entity. This statement is outlined by every enterprise, sole proprietorship firm or a partnership enterprise. It reveals the financial security of the enterprise. | A cash flow statement is a financial statement that presents total data concerning complete cash inflows a business gains from its continuing progress and external financing sources, as well as all cash outflows that pay for trading activities and finances during a delivered time. |
| Categorised into | 2 sections | 3 sections |
| Significance | Reveals the financial status of an enterprise. | Helpful in predicting and budgeting. |
| Data disclosed | Assets, Liabilities and Equities. | Cash equivalent and movement of cash. |
| Basis | It is outlined taking P&L a/c into contemplation. | It is outlined taking both P&L a/c and balance sheet into contemplation. |
Also Read:Â Â Difference between Balance Sheet and Financial Statement
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