Learning Materials For Accounting, Management , Finance And Economics.

Saturday, April 3, 2010

Concept of "Statement" In Funds Flow Statement

A statement is a written record which presents some kind of information and facts about some events in a systematic manner.The funds flow statement is,therefore, a written record of the source of funds in terms of net working capital and its application on different heads during a particular period of time. It is also called statement of sources and application of funds or how funds come and where funds gone statement.The funds flow statement is prepared by using one of the following forms.

1. Horizontal Form

The funds flow statement can be prepared by using the horizontal form. In this form,sources of funds are shown on the left-hand side and uses or applications of funds on the right-hand side of the statement.

2. Vertical form

The funds flow statement can be prepared by using the vertical form. In this form,sources of funds are shown on the upside and uses or applications of funds on the down-side of the statement.