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Check and balance in cash flow

Ankush Garg
29/03/2017 0 0

Cash flow statement is not the part of double entry book keeping process which starts from journal entry and sums up in balance sheet. But is drawn on the basis of balance sheets of two years it'sanswer concludes in closing balance appearing in latter balance sheet.

To ignore the mistakes commonly happen due to adjustments given below the question, it is necessary to understand that there treatment will not effect the final answer. Their treatment have equalising effect. The amount added in cash flow due to that adjustment in one head must have another subtracting effect under same or any other head. For example where a long term asset sold for profit. The value of profit is to be deducted from operating and added under investing as part of sale price over cost of that particular asset.

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