Fund Flow Statement and Balance Sheet: Differences | Accounting

The upcoming discussion will update you about the difference between fund flow statement and balance sheet. 

Difference # Fund Flow Statement:

1. It is dynamic in nature. It shows the changes in financial position between two dates.

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2. It incorporates items causing changes in working capital.

3. It is a management tool for financial analysis and help in decision-making.

4. The preparation of this statement is a post Balance Sheet exercise.

Difference # Balance Sheet:

1. It is static in nature. It is prepared at the end of accounting period and portrays the financial position on a particular date.

2. It includes the balance of real and personal accounts and shows the total resources.

3. It reveals the financial position of a business firm and one can examine the soundness of the firm.

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4. It is the end product of all accounting operations for a particular period of time.

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