1. Meaning of Cash Flow Statement.
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| Meaning of Cash Flow Statement |
Answer-: Cash flow is the flow of cash into and out of
business. Cash flow statement is a statement that shows an enterprise’s inflow
and outflow of cash during a particular accounting period.
In effect, the statement
explains how the cash held by the business have changed from the opening
Balance Sheet and Closing Balance Sheet.
A cash flow statement is prepared to reconcile
the opening and closing balance of an accounting period. Cash flow statement is
considered to provide more useful information to the users than fund flow
statements.
It is important to the users of
accounting information in identifying the amount and source of cash receipt and
cash payment of a business unit during an accounting period.
2. Main sources of Cash Flow Statement.
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| Main Source of Cash Flow Statement |
Answer-: 1. Cash
flow operations
2. Issue of share
and Debentures
3. Loan from Bank
4. Income from
Investments
5. Sale of Machinery
6. Acceptance of
public deposits
7. Sale of
Investments
8. Sale of Land and
Building
3. Main uses of Cash Flow Statement.
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| Main Uses of Cash are |
Answer-: 1. Cash
utilized in Operations
2. Redemption of
Preference Share and Debentures.
3. Repayment of Loan
4. Purchase of Fixed
Assets
5. Purchase of
Investments
6. Purchase of
Dividends
7. Payment of taxes
8. Payment of
Preliminary Expenses
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