Concept of flow of funds, Accounting Basics

Concept of Flow of Funds:  It refers to the 'Change in Funds' or 'Change in Working Capital'.  That is, any increase or decrease in Working Capital. In business, daily, numerous transactions get place.  a few of these transactions increase the Funds while others might be decrease the Funds and a few may not make any transform in the Funds position. If a deal results in increase of Funds, it will be defined as a 'Source of Funds'.  In case a transaction results in decrease of Funds, it will be taken as an application or use of Funds.  In case a transaction does not make any change in the funds position that existed just before the occurrence of the transaction, it is supposed that it is a non-Fund transaction.

Posted Date: 10/15/2012 6:18:50 AM | Location : United States







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