Funds flow statement is complementary to________

Question

RRB Paper · Accepted Answer

Funds flow statement is complementary to income statement.
It helps preparation of funds flow statement.
Income statement is not prepared from funds flow statement. While preparing funds flow statement, both capital and revenue items are considered, but for the preparation of income statement, only revenue items are considered.
Funds flow statement highlights the changes in the financial position of a business and indicates the various means by which funds were obtained during a particular period and the ways by which these funds were employed.
Whereas income statement does not reveal the inflows and outflows of funds but depicts the items of expenses and income arrived at the figure of profit or loss. Funds flow statement is complementary to income statement.

balance sheet