Difference between funds flow statement and balance sheet
|Differences Between Funds Flow Statement and Balance Sheet
The following table presents 14 points of differences between funds flow statement and balance sheet.
Funds flow statement | Balance Sheet |
1. It shows the working capital changes between two balance sheet datas. | 1. It shows the assets and liabilities position of the company on a particular date. |
2. It shows the changes in the financial position of the company and dynamic in nature. | 2. It is a statement of financial position of the company on a particular date and static in nature. |
3. It does not deal with the personal accounts of the business. | 3. The balance sheet contains the details of personal account also. |
4. It shows the sources and uses of funds in a particular period of time. | 4. It discloses the value of assets and liabilities at a particular point of time. |
5. The flow of funds over a period of time is known from the funds flow statement. | 5. The flow of funds cannot be find ‘ out on seeing balance sheet. |
6. It is tool for financial analysis to the top management. | 6. Balance sheet cannot be used as a tool for financial analysis to the top management. |
7. A schedule of changes in working capital is prepared before preparing funds flow statement. | 7. Profit and loss account is prepared before preparing balance sheet. |
8. Funds flow statement is prepared whenever a need raised to the top management. | 8. Balance sheet is prepared at the end of the accounting period. |
9. Funds flow statement is not published. | 9. Balance sheet is published. |
10. Funds flow statement is used mostly by the top management. | 10. Balance sheet is normally used by external parties. |
11. Balance sheet is used to prepare funds flow statement. | 11. Funds flow statement cannot be used for preparing balance sheet. |
12. The information of balance sheet are used for preparing funds flow statement. | 12. The information of trial balance are used for preparing balance sheet. |
13. It is prepared only after the financial accounts are completed. | 13. It is prepared soon after preparing profit and loss account. |
14. Funds flow statement is prepared by the Management Accountant. | 14. Balance Sheet is prepared by the Chartered Accountant |
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