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Learn the concepts of Class 12 Accountancy Cash Flow Statement with Videos and Stories.
Objective of cash flow statement. To determine net changes in cash and cash equivalents. One of the major objectives and benefits of a cash flow statement is to inform the users of financial statements about the cash flows of the company. The primary objective of the cash flow statement is to help management in making a decision and making a plan by providing current information on cash inflow and outflow of any accounting period.
Cashflow statement which specifies the cash flow from operating investing and financing activities of the business are prepared with the objective to specify the cash earnings and liquidity position of the entity during the period. The management can find the movement of cash for a specific period. The objective of a statement of cash flows is to present financial information about changes in the cash and cash equivalents of an entity during the period.
Cash Flow Statement Concept of Cash Flow. A Measurement of Cash. Read this article to learn about the top eight objectives of cash flow statement.
The fundamental objective behind the preparation of the Cash Flow Statement is to underline and emphasis the changes that have taken place in the Cash Position during a specific period. It is usually measured during a specified limited period of time. Cash flow is the movement of money in or out of a business project or financial product.
The sources from where the cash was procured by an organisation and the uses to which it the cash was put are elaborated in the cash flow statement. The purpose of a cash flow statement is to record both cash inflow and outflow of a firm and account for them accordingly. Below are the 8 Objectives of Financial Statements.
Explain the meaning of cash flows. It is also known as a combination of cash inflows receipt and cash outflows payment during a certain time period. A cash flow statement shows inflow and outflow of cash and cash equivalents from various activities of a company during a specific period.
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