Question

The term 'funds' as used in fund flow statement means ________________.

• A. Cash
• B. Current assets
• C. Current liabilities
• D. Current assets and liabilities

Answer 1

Answer: (B)

Current assets

Fund flow statement is a statement of cash inflows and cash outflows. There are persons who feel that the funds are cash or working capital which represent the excess of current assets over current liabilities. The term flow means movement and includes both inflows and outflows of resources.And the funds used in the flow statement is a current assets.