Question

State any two differences between Fund flow Statement and Balance Sheet.

Hint:

Fund flow = movement over time; Balance sheet = position at a date.

Answer 1

Step 1: Meaning.
- Fund Flow Statement: It shows the changes in financial position of a company between two balance sheet dates, explaining sources and uses of funds.
- Balance Sheet: It is a statement of assets and liabilities of a company on a particular date.
Step 2: Differences.
1. Purpose: Fund flow statement shows movement of funds, while balance sheet shows financial position.
2. Period vs Date: Fund flow statement covers a period of time, whereas balance sheet shows position on a particular date.
Step 3: Conclusion.
Both are financial tools, but fund flow explains movement of funds while balance sheet presents financial status at a point in time.