Learning Materials For Accounting, Management , Finance And Economics.

Sunday, April 11, 2010

Difference Between Balance Sheet And Funds Flow Statement

The main differences between balance sheet and fund flow statement are as below:

1. Meaning

Balance Sheet: Balance sheet is a statement of assets, liabilities and capital.
Funds Flow Statement: Funds flow statement is a statement if changes in assets, liabilities and capital accounts.

2. Objective

Balance Sheet: Balance sheet is prepared to ascertain the financial position of a firm.
Funds Flow Statement: It is prepared to ascertain the sources and application of funds.

3. Preparation

Balance Sheet: It is prepared with the help of trial balance.
Funds Flow Statement: It is prepared with the help of balance sheets of two subsequent dates.

4. Information

Balance Sheet: It provides static view of financial affairs.
Funds Flow Statement: It provides the changes in assets, liabilities and capital accounts.