What is Cash Flow Statement?
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Solution and Explanation
A Cash Flow Statement is a statement that shows the inflows (receipts) and outflows (payments) of cash and cash equivalents of an enterprise during a particular accounting period.
Step 2: Explain its structure:
These flows are classified under three heads — Operating Activities, Investing Activities, and Financing Activities — and the statement reconciles the opening cash balance to the closing cash balance for the period.
Final Answer:
Cash Flow Statement is a statement summarising an enterprise's cash inflows and outflows, classified into operating, investing and financing activities, for a given period.
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Top UP Board XII Cash Flow Statement Questions
- Cash flow statement is prepared from
From the following information, prepare Cash Flow Statement from the operating activities:
Items Rs. Net profit of current year 1,00,000 Transfer to general reserve 10,000 Decrease in debtors 25,000 Decrease in bills payable 20,000 Discount on shares written off 5,000 Increase in stock 18,000 Loss on sale of machine 12,000 Profit on sale of investment 4,000
\[ \text{Cash Flow from Operating Activities} \] \[ \begin{array}{|l|r|} \hline \textbf{Particulars} & \textbf{Rs.} \\ \hline \text{Net Profit before Adjustments} & 1,00,000 \\ \hline \text{Add: Decrease in Debtors} & 25,000 \\ \text{Add: Profit on Sale of Investment} & 4,000 \\ \hline \text{Less: Transfer to General Reserve} & (10,000) \\ \text{Less: Decrease in Bills Payable} & (20,000) \\ \text{Less: Discount on Shares Written Off} & (5,000) \\ \text{Less: Increase in Stock} & (18,000) \\ \text{Less: Loss on Sale of Machine} & (12,000) \\ \hline \text{Net Cash Flow from Operating Activities} & 64,000 \\ \hline \end{array} \]- Which accounting standard is related to cash flow statement?
- State any two objectives of a cash flow statement.
The following is the position of current assets and current liabilities of Z Ltd.:
\[\begin{array}{|l|r|r|} \hline Items & March, 2022 (Rs.) & March, 2023 (Rs.) \\ \hline \text{Provision for doubtful debts} & \text{1,000} & \text{--} \\ \hline \text{Short-term loans} & \text{10,000} & \text{19,000} \\ \hline \text{Creditors} & \text{15,000} & \text{10,000} \\ \hline \text{Bills payable} & \text{20,000} & \text{40,000} \\ \hline \end{array}\]
The company incurred a loss of Rs. 45,000 during the year. Calculate cash from operating activities.
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