Balance Sheet vs Cash Flow Statement

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 2 titles in a Balance Sheet. Namely – assets (inventory, accounts receivable), equity (share capital, capital surplus) and liability (accounts payable, customer deposits). 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. To put it 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.

Also Explore Study Tips for Accountancy Exam 2019

This article is a ready reckoner for all the students to learn the Difference between Balance Sheet and Cash Flow Statement.

Basis

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.

The above mentioned is the concept, that is elucidated in detail about ‘Difference Between Balance Sheet and Cash Flow Statement’ for the Commerce students. To know more, stay tuned to BYJU’S.

You Might Also Like to Read:

What is the difference between a Balance Sheet and Financial Statement?