Question

9.
Fund flow statement is prepared on the basis of data of profit & loss statement and
two consecutive balance sheets :
(A) True
(B) False
(C) Value delivery
(D) None of these​

Answer 1

It is true that the funds flow statement is prepared on the basis of data of profit & loss statement and two consecutive balance sheets (option A).

• Funds flow statement is useful for the analysis and management of finance.
• Funds flow statement helps to recognize changes in the funds and shows whether they have increased or decreased periodically.  
• It shows any type of alteration in the working capital and also helps to identify the reason.
• The Funds flow statement is also called the statement of sources and uses of funds.