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Reserves and Surplus

Which one of ...

Question

Which one of the following concepts is used as fund in the preparation of Funds Flow Statements?

A

Current Assets

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B

Working Capital

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C

Cash

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D

All Financial Resources

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Solution

The correct option is A Working Capital
According to working capital concept, the term 'funds' refers to net working capital (current assets-current liabilities). In the funds statement, inflow and outflow of net working capital is displayed.

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