Difference between Funds Flow Statement and Cash Flow Statement

Basis of Difference 1. Basis of Analysis

Funds Flow Statement Funds flow statement is based on broader concept i.e. working capital. Funds flow statement tells about the various sources from where the funds generated with various uses to which they are put.

Cash Flow Statement Cash flow statement is based on narrow concept i.e. cash, which is only one of the elements of working capital. Cash flow statement stars with the opening balance of cash and reaches to the closing balance of cash by proceeding through sources and uses.

2.

Source

3.

Usefulness

Funds flow statement is more Cash flow statement is useful in useful in assessing the long-range understanding the short-term financial strategy. phenomena affecting the liquidity of the business. In cash flow statement changes in current assets and current liabilities are shown in the cash flow statement itself.

4.

Schedule of Changes In funds flow statement changes in in Working Capital current assets and current liabilities are shown through the schedule of changes in working capital. Causes Funds flow statement shows the causes of changes in net working capital.

5.

Cash flow statement shows the causes the changes in cash.

6.

Principal of Accounting

Funds flow statement is consonant In cash flow statement data obtained with the accrual basis of on accrual basis are converted into accounting. cash basis.

Job Order Costing 1. Many different jobs are worked on during each period, with each job having different production requirements. 2. Costs are accumulated by individual job.

Process Costing 1. A single product is produced either on continuous basis or for long periods. All units of product are identical. 2. Costs are accumulated by departments.

3. Job cost sheet is the key document controlling the accumulation of costs by a job.

3. The department production report is the key document showing the accumulation and disposition of costs. 4. Unit costs are computed by department on the department production report.

4. Unit costs are computed by job on the job cost sheet.