Question

*Which funds uses a statement of cash flow

* examples of activities that use internal service funds vs enterprise funds

Answer 1

Cash flow Defined In three activities

Cash flow from operation principle revenue generation.

Cash flow from Investing acquisition in disposal of long term Assets and other Investments.

Cash flow from financing changes in the size and composition of the owner's equity and borrowings.

We make classification of transaction and set it under these three flows.

Definition Of cash flow statement

Cash flow statement is a summary of cash receipts and cash payments for accounting period.

Important of cash flow statement

History changes & future requirement of cash & cash equivalent.

Ability to generate cash and cash& cash equivalents.

Operational efficiency of Different enterprise.

Insolvency and liquidity position of an enterprise.

indicator of amount timing and fertility of future cash flows.

Accuracy of past adjustments of future cash flow cash flows.

Cash flow statement depicts.

Internal service fund v/s enterprise fund

An internal service fund is a fund used in governmental accounting to track goods or services shifted between departments on a cost reimbursement basis. An example of an internal service fund is a maintenance department that provides equipment maintenance services to other departments. This type of fund is used to identify the cost of providing certain goods and services.

Enterprise fund
in governmental accounting, is a proprietary fund that provides services to a public for a fee. Examples of enterprise funds are governmentally owned utilities and governmental hospitals.