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Whats the difference between the Statement of Cash Flows and the beginning and ending cash on the Balance Sheet? What should
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Justification: The Statement of Cash Flow deals with the All types of activity the enterprises has undertaken during the financial Year, for generation of cash over a period. It is sum of whether the business has generated cash from outlay or leads to extra requirement of cash. Complete focus on the Actitvity which are contributing in generation of cash or activity where decision has went wrong. This Helps to evaluate the Level of Liquidity flow within an enterprise. Helps in Making Future decision,

Where as Beginning and Ending Cash Balance has nothing to deal with utilisation of capital, they reflect the balancing figure the enterprise has started with and showing the cash balance at the end of the period. It will not emphasis on activity wise but it also mirrored the capital requirement and reveal the liquidity flow within an enterprises.

Net Change in Cash Section of the Statement of Cash Flows Always reconcile with the Closing Cash Balance as Appearing on the Balance Sheet. As The Change is Derived as Beginning Cash balance + Change in Activities = Closing Cash Balance.

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