Вы находитесь на странице: 1из 4

1.What is Fund Flow Statement?

The financial statement of the business indicate assets, liabilities and capital on a particular date and also the profit or loss during a period. But it is possible that there is enough profit in the business and the financial position is also good and still there may be deficiency of cash or of working capital in business. If the management wants to find out as to where the cash is being utilized, financial statement cannot help. Therefore, a statement is prepared of the sources and applications of funds from where Working Capital comes and where it is utilized. This is called Fund Flow statement. 2. What is the Meaning of Fund? In a popular and generally accepted sense the term fund is used to denote the excess of current assets over current liabilities : Working Capital = Current Assets Current Liabilities

3. What is the Meaning of Flow of Fund? Flow of funds means transmigration (coming and going) of funds. In other words, Flow of funds means change in Working capital, as in funds flow statement the words funds mean net working capital. 4. Definition fund flow statement? According to R.N. Anthony, Fund Flow is a statement prepared to indicate the increase in cash resources and the utilization of such resources of a business during the accounting period. According to Smith Brown, Fund Flow is prepared in summary form to indicate changes occurring in items of financial condition between two different balance sheet dates. Coleman rightly states that, The fund statement is statement summarizing the significant financial change which have occurred between the beginning and the end of a companys accounting period.

5. What are the components of fund flow statement? Funds Flow statement is prepared on the basis of working capital. Under this method the following two statements are prepared: 1. Schedule of changes in Working Capital 2. Funds Flow statement 6. What is Schedule of changes in Working capital? Schedule of changes in net working capital is a statement prepared to ascertain the net change (increase or decrease) in working capital over period of time. An increase in working capital is shown as a use of funds, while a decrease is shown as a source of fund in the fund flow statement. 7. What are the two methods of Funds Flow Statement? 1. Report Form, 2. Account Form 8. Tools or methods or devices are used to study the relationship between financial statements? Comparative financial statements Common size statements Trend analysis Ratio analysis Funds flow analysis Cash flow analysis

9. What do you mean by Analysis of financial statements? It means establishing meaningful, relationship between various items of the two financial statements i.e. income statement and position statement. 10. Who are the parties interested in analysis of financial statement? The main parties interested in analysis of financial statement are (i) Investor (ii) Management

(iii) Trade unions (iv) Lenders (v) Trade creditors (vi) Employees (vii) The authorities (viii) Government (ix) Stock exchange (x) Researchers

11. What are the major techniques of financial statement analysis? The major techniques of financial statement analysis are (i) Cross-sectional analysis (ii) Time series analysis (iii) Cross-sectional and time series analysis.

1. What do you mean by costing? Cost accounting is the process of determining and accumulating the cost of product or activity. It is a process of accounting for the incurrence and the control of cost. It also covers classification, analysis, and interpretation of cost. In other words, it is a system of accounting, which provides the information about the ascertainment, and control of costs of products, or services. It measures the operating efficiency of the enterprise. It is an internal aspect of the organization. 2. What is mean by Cost Accounting? Cost Accounting is accounting for cost aimed at providing cost data, statement and reports for the purpose of managerial decision making. The Institute of Cost and Management Accounting, London defines Cost accounting is the process of accounting from the point at which expenditure is incurred or committed to the establishment of its ultimate relationship with cost centers and cost units. In the widest usage, it embraces the preparation of statistical data, Application of cost control methods and the ascertainment of profitability of activities carried out or planned. 3. What are the objects of cost accounting? 1. Determining selling price, 2. Controlling cost 3. Providing information for decision-making 4. Ascertaining costing profit 5. Facilitating preparation of financial and other statements. 4. What are the Importance of Cost accounting 1. Importance to Management: 2. Importance to Employees 3. Cost accounting and creditors 4. Importance to National Economy
5. What are the Limitations

of cost accounting

1.It is expensive 2. The results shown by cost accountant differ from those shown by financial accountant. It is unnecessary because it involves duplication of work.