In: Accounting
What kind of account is a cash flow account? Is it considered a liability, asset or something else?
Ans:
Cash flow account is not an asset or liability account. Cashflow account is a statement which shows the flow of Cash during a period. It represents all cash generated and spent from the opreations of the business.
Cashflow account states the cash movement of the business. There are two method of Cash Flows; direct or indirect to represent how Cash of the company flows from different account. Cash flow statement is simply a reconciliation between a company's Opening and closing cash balances.
Where is asset and liabilities accounts are used to represent a Balance Sheet. Assets and liabilities are the part of balance sheet to identifity the net worth of Business.
So cash flow account is not an asset or liability account. Its a statement which records the flows of Cash in and out for monitoring of Money in Businesses.
For any query please ask in comment box, we are happy to help you. Also please don't forget to provide your valuable feedback. Thanks!