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Chapter No. 5 - Cash Flow Statement – USHA Publication Class +2 (Part 2) – Solution

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The financial statement of the business included the three statements theses are Trading and Profit/loss account, Balance sheet and Cash flow statement. It is also a very important statement which shows the actual flow of cash i.e. inflow and outflow of the cash and cash equivalents.

What is the Cash flow Statement?

The cash flow statement is that statement which shows the inflow and outflow of cash and cash equivalents for the particular financial year. The inflow of cash & cash equivalents means those transactions which increase in the balance of cash & cash equivalents and the outflow of cash & cash equivalents means those transactions which decrease in the balance of the cash & cash equivalents. Now you have the following questions in your mind:

What is cash & cash Equivalents?

The cash & cash equivalents include cash in hand, cash at bank, Marketable security, etc. The current investment also considered as marketable security if not specified it.

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