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Preparing Financial Statements of NPO-II

What is a Cas...

Question

What is a Cash Flow Statement?

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Solution

A Cash Flow Statement is a statement showing inflows and outflows of cash and cash equivalents from operating, investing and financing activities of a company during a particular period. It explains the reasons of receipts and payments in cash and change in cash balances during an accounting year in a company.

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Q. What is meant by $'Cash Equivalents ' While preparing Cash Flow Statement?

Q. Which of the following statement is true?
a. Cash flow reveals only the inflow of cash.
b. Cash flow reveals only the outflow of cash.
c. Cash flow is a substitute for income statement.
d. Cash flow statement is not a replacement of funds flow statement.

Q. Which of the following statement is false?
a. Cash flow statement is helpful in the formation of policies.
b. Cash flow statement is useful for external analysis.
c. Cash flow statement is helpful in estimating future cash flow.

Q. 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 :-

The statement of cash flows clarifies cash flows according to :

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