Question

A) Funds flow statement and cash flow statement are one and the same.
B) A cash flow statement can very well be equated with an 'Income statement'.
Of these statements :-

• A. Both (A) and (B) are true
• B. Both (A) and (B) are false
• C. (A) is true but (B) is false
• D. (A) is false but (B) is true

Answer 1

The correct option is B Both (A) and (B) are false

(A) A cash flow statement is different from a cash budget. A cash flow statement shows the cash inflows and outflows which have already taken place during a past time period.

Funds Flow Statement states the changes in the working capital of the business in relation to the operations in one time period.

(B) A cash flow statement shows the exact amount of a company's cash inflows and outflows over a one-month period.

The income statement is the most common financial statement, and shows a company's revenue and total expenses, including non-cash accounting such as depreciation, over a one-month period.

Both are different.