Download CBSE Class 12 Accountancy Cash Flow Statement Notes Set B in PDF format. All Revision notes for Class 12 Accountancy have been designed as per the latest syllabus and updated chapters given in your textbook for Accountancy in Class 12. Our teachers have designed these concept notes for the benefit of Class 12 students. You should use these chapter wise notes for revision on daily basis. These study notes can also be used for learning each chapter and its important and difficult topics or revision just before your exams to help you get better scores in upcoming examinations, You can also use Printable notes for Class 12 Accountancy for faster revision of difficult topics and get higher rank. After reading these notes also refer to MCQ questions for Class 12 Accountancy given on studiestoday
Revision Notes for Class 12 Accountancy Part 2 Chapter 6 Cash Flow Statement
Class 12 Accountancy students should refer to the following concepts and notes for Part 2 Chapter 6 Cash Flow Statement in Class 12. These exam notes for Class 12 Accountancy will be very useful for upcoming class tests and examinations and help you to score good marks
Part 2 Chapter 6 Cash Flow Statement Notes Class 12 Accountancy
CHAPTER 12
CASH FLOW STATEMENT
Meaning : It is a statement that shows flow (inflow or outflow) of cash and cash equivalents during a given period of time. As per Accounting Standard3
(Revised) the changes resulting in the flow of cash & cash equivalents arises on account of three types of activities i.e.
(1) Cash flow from Operating Activities.
(2) Cash flow from Investing Activities.
(3) Cash flow from Financing Activities.
Cash : Cash comprises cash in hand and demad deposits with bank.
Cash equivalents : Cash equivalents are shortterm higly liquid investment that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in the value (of shotterm investment). Generally theses investment have a maturity period of less than three months.
Some example of cash equivalent : Bank overdraft, cash credit, shortterm deposits, maketable securities, treasury bills, commercial papers, money market funds (mutual fund), investment in preference shares if redeemable within three months and ensure that there is no risk of the failure of the company. Some type of transaction which are considered movement between cash and cash equivaletns are given below :
1. Cash deposited into bank.
2. Cash withdrawn from bank.
3. Sale of cash equivalent securities (e.g. sale of short term investment, sale of commercial papers)
4. Purchase of cash equivalent securities (e.g. Purchase of shortterm investment, Purchase of Treasury bills).
The above types of transaction are part of cash and cash equivaltens, so these are included in opening and closing cash and cash equivalent only. So these types of transanction not be included in cash from different activities like operating, investing, financing activities.
Preparation of cash flow statement :
Cash flow from operating activities _______
Cash flow from investing activities _______
Cash flow from financing activities _______
Net increase/decrease in cash & cash equivalent (Total of the above three activities) Add : Cash & Cash equivalent in the
beginning of the year (Given in opening balance sheet) _______
Cash & Cash equivalent at the end of the year _______
Note : The student should ensure that the cash & Cash equivalent at the end of the year as calculated above will be same as cash & cash equivalent given in closing balance sheet
OBJECTIVES OF CASH FLOW STATMEMENT :
1. To ascertain how mach cash or cash equivalents have been generated or used in different activities i.e. operating/investing/financing activity.
2. To ascertain the net changes in cash and cash equivalents.
3. To assesss the causes of difference between actual cash & cash equivalent and related net earning/income.
4. To help in formulation of financial policies such as dividend policy, fixed assests policy, capital structure related policy.
5. To help in shortterm financial planing.
6. To ascertain the liquidity of enterprises
LIMITATIONS OF CASH FLOW STATEMENT
1. Non cash transaction are not taken into consideration like sahres or debentures issued to vendores, deprecaition charged during the year.
2. It is a statement related with past data.
3. It is not used for judging the profitability of enterprises.
4. Accrual accounting concept is ignored in this statement e.g. credi sales, credit purchases, outstanding expesnes, accrued income are not included. Computation of Cash flow from different activities.
(1) Cash flow from operating activities : operating activities are the main revenue generating activities of the enterprises. It includes tha transaction also which are not included in investing and financing activities. Accounting standard 3 (Revised) has suggested two methods of computing net cash from operating activities (A) Direct Method (B) Indirect Method. (C) Indirect Method of calculating the cash flow from Operating Activities :
Under this method Net Profit Before Tax and Extraordinary Item is the starting point further calculations.
Calculations of Net Profit Before Tax Extra ordinary Item :
Difference between closing balance and opening balance of profit & loss A/c ____
Add : 1. Proposes divident for current year ____
2. Interim Divident paid during the year. ____
3. Profit Transferred to Reserve
(If reserve of current year increased from previous year) ____
4. Provision for Taxation made durning the year ____
Less : 1 Refund of Tax credited to P & L A/c ____
2. Extraordinary item if any Credited to P & L A/c ____
Net Profit Before Tax and Extraordinary Item Extraordinary items : These items are not related to normal business operation and not included in investing and financing activities
Please click the link below to download pdf file for CBSE Class 12 Cash Flow Statement
CBSE Class 12 Accountancy Important Formulas |
CBSE Class 12 Accountancy Accounting For Not For Profit Organisations Notes Set A |
CBSE Class 12 Accountancy Accounting For Not For Profit Organisations Notes Set B |
CBSE Class 12 Accountancy Accounting For Partnership Firms Admission Of A Partner Notes |
CBSE Class 12 Accountancy Accounting For Partnership Firms Fundamentals Notes |
CBSE Class 12 Accountancy Reconstitution Of Partnership Notes |
CBSE Class 12 Accountancy Retirement Or Death Of A Partner Notes |
CBSE Class 12 Accountancy Dissolution Of A Partnership Firm Notes |
CBSE Class 12 Accountancy Accounting For Debentures Notes |
CBSE Class 12 Accountancy Redemption Of Debenture Notes |
CBSE Class 12 Accountancy Financial Statement Of Companies Notes |
CBSE Class 12 Accountancy Analysis Of Financial Statements Notes |
CBSE Class 12 Accountancy Partnership Common Size And Comparative Statements Notes |
CBSE Class 12 Accountancy Part 2 Chapter 6 Cash Flow Statement Notes
We hope you liked the above notes for topic Part 2 Chapter 6 Cash Flow Statement which has been designed as per the latest syllabus for Class 12 Accountancy released by CBSE. Students of Class 12 should download and practice the above notes for Class 12 Accountancy regularly. All revision notes have been designed for Accountancy by referring to the most important topics which the students should learn to get better marks in examinations. Our team of expert teachers have referred to the NCERT book for Class 12 Accountancy to design the Accountancy Class 12 notes. After reading the notes which have been developed as per the latest books also refer to the NCERT solutions for Class 12 Accountancy provided by our teachers. We have also provided a lot of MCQ questions for Class 12 Accountancy in the notes so that you can learn the concepts and also solve questions relating to the topics. We have also provided a lot of Worksheets for Class 12 Accountancy which you can use to further make yourself stronger in Accountancy.
You can download notes for Class 12 Accountancy Part 2 Chapter 6 Cash Flow Statement for latest academic session from StudiesToday.com
Yes, the notes issued for Class 12 Accountancy Part 2 Chapter 6 Cash Flow Statement have been made available here for latest CBSE session
There is no charge for the notes for CBSE Class 12 Accountancy Part 2 Chapter 6 Cash Flow Statement, you can download everything free of charge
www.studiestoday.com is the best website from which you can download latest notes for Part 2 Chapter 6 Cash Flow Statement Accountancy Class 12
Come to StudiesToday.com to get best quality topic wise notes for Class 12 Accountancy Part 2 Chapter 6 Cash Flow Statement