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Steps in Preparation of Funds Flow Statement Homework Help: Useful Guidance for Students
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Preparation of Funds Flow Statement is a lengthy process and though we won’t be delving into the depths of it right away, here is a brief idea on the topic for you.
What is a Funds Flow Statement?
A Funds Flow Statement explains the changes in a Company’s Working Capital Position. It is developed to analyze the causes for change in a company’s financial position in between two Balance Sheets. It represents the inflow and outflow of cash for a given period.
What are the steps in preparation of a Fund Flow Statement?
We are enlisting the steps involved in the preparation of a Funds Flow Statement, without going into the details. The steps involve:
- Creating the Fund Flow statement.
- Creating the Statement of Changes in working Capital.
- Concocting the Fund from Operation or Fund lost in Operation.
- Making important adjustments and their proper treatment.
- Creating a separate ledger.
- Proper treatment of the provision for taxation and proposed dividend.
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