Class 12 Accountancy - HARYANA
Cash Flow Statement
The Cash Flow Statement chapter in Class 12 Accountancy under the Haryana Board (BSEH) focuses on tracking the inflow and outflow of cash and cash equivalents in a business over an accounting period. As per AS-3 (Revised), it is divided into three main activities: Operating, Investing, and Financing. This chapter is extremely crucial for board exams as it consistently features a compulsory 6-mark practical question on the comprehensive preparation of a cash flow statement, along with various theoretical and short-answer questions. Mastering this topic ensures high scoring potential in your final exams.
Start Learning FreeKey Concepts
Operating Activities
Principal revenue-producing activities of the enterprise, such as cash receipts from the sale of goods and services.
Investing Activities
Acquisition and disposal of long-term assets and other investments not included in cash equivalents.
Financing Activities
Activities that result in changes in the size and composition of the owner's capital and borrowings of the enterprise.
Cash and Cash Equivalents
Comprises cash on hand, demand deposits with banks, and short-term, highly liquid investments that are readily convertible to known amounts of cash.
Non-Cash Items
Expenses like depreciation and goodwill amortization that do not involve any actual outflow of cash and are adjusted in operating profits.
Important Formulas
Board Exam Info
In the Haryana Board (BSEH) Class 12 Accountancy exam, this chapter typically carries around 6 to 8 marks. You can definitely expect one long 6-mark numerical question requiring the preparation of a Cash Flow Statement with multiple adjustments, alongside 1 or 2 objective/very short-answer questions.
Frequently Asked Questions
Is the Cash Flow Statement mandatory for all companies under the Companies Act?
Yes, as per Section 2(40) of the Companies Act, 2013, a Cash Flow Statement is a mandatory part of the financial statements for all companies except One Person Companies (OPC), small companies, and dormant companies.
How do we treat proposed dividend of the previous year in a Cash Flow Statement?
The previous year's proposed dividend is added back to operating activities (as non-operating expense/appropriation) and shown as an outflow under financing activities when paid.
Are bank overdrafts treated as bank balances in cash and cash equivalents?
No, bank overdrafts and cash credits are generally treated as financing activities (short-term borrowings) rather than cash equivalents, unless they form an integral part of cash management.
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