| Basis of Difference |
Balance Sheet |
Funds Flow Statement |
| Objective |
A balance sheet is prepared in order to show
the financial position of a business at a particulars date. |
A funds flow statement is prepared in order
to show the overall inflow or outflow of working capital during
a period of time. |
| Incorporation |
A balance sheet incorporates all assets and
liabilities of the business on a particular date. |
A funds flow statement incorporates the different
sources and application of funds during a period. |
| Basis |
The balance sheet is prepared on the basis
of balances of ledger at the end of a particular period. |
Funds flow statement is prepared on the basis
of Profit & Loss A/c, Balance Sheet and other additional
information. |
| Format |
A balance sheet is prepared in a prescribed
format by Indian Companies Act. |
There is no prescribed format for preparation
of funds flow statement. |
| Concept |
A balance sheet is based on stock concept.
It shows the position of assets and liabilities on a particular
date. |
A funds flow statement is based on flow concept.
It shows the causes for changes in working capital during
a period of time. |
| Compulsion |
It is compulsory for a company to prepare and
present its balance sheet at the time of its general meeting. |
It is not compulsory for a company to prepare
and present funds flow statement. |
Accounts
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