Class 12 Accountancy - TAMILNADU
Cash Flow Statement
The Cash Flow Statement chapter in Class 12 Accountancy under Tamil Nadu Samacheer Kalvi syllabus focuses on tracking the inflow and outflow of cash and cash equivalents in a business enterprise. As per Accounting Standard-3 (AS-3), it classifies business activities into Operating, Investing, and Financing activities. This chapter is vital for board exams as it consistently features a major 5-mark or 10-mark practical problem. Mastering this topic requires a clear understanding of non-cash adjustments, working capital changes, and the precise formatting mandated by the board for company final accounts.
Start Learning FreeKey Concepts
Operating Activities
Principal revenue-generating activities of the enterprise, such as cash receipts from the sale of goods and payments to suppliers and employees.
Investing Activities
Acquisition and disposal of long-term assets and other investments not included in cash equivalents, like purchase of machinery or sale of land.
Financing Activities
Activities that result in changes in the size and composition of the owner's capital and borrowings of the enterprise, such as issuing shares or paying dividends.
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 or incomes like depreciation, goodwill written off, and loss on sale of assets that do not involve actual cash outflow or inflow, added back or deducted from net profit.
Important Formulas
Board Exam Info
In the Tamil Nadu (Samacheer Kalvi) Class 12 Accountancy board exam, this chapter typically carries around 10 to 15 marks. Questions usually include one compulsory 5-mark or 10-mark full-length practical problem requiring the preparation of a Cash Flow Statement using the indirect method, alongside 1-mark objective questions.
Frequently Asked Questions
Which method of Cash Flow Statement is prescribed for Class 12 Samacheer Kalvi students?
Students are required to prepare the Cash Flow Statement using the Indirect Method as per Accounting Standard 3 (AS-3).
How do we treat proposed dividend and provision for tax in the cash flow statement?
Current year provision for tax and proposed dividend are added to net profit to calculate profit before tax, and the previous year's tax paid is subtracted under operating activities.
Are bank overdrafts treated as bank balances or financing activities?
In Tamil Nadu Samacheer Kalvi problems, bank overdrafts and cash credits are generally treated as part of financing activities or deducted from cash and cash equivalents depending on the specific problem guidelines.
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