Explain preparation of Fund Flow Statement with and example.

A Fund Flow Statement is a financial report that explains the movement of funds (or working capital) within a business over a period of time. It highlights the sources and uses of funds, showing how the funds were generated and utilized during the accounting period. The primary purpose of a Fund Flow Statement is to analyze the changes in financial position from one period to another, helping stakeholders understand the liquidity and financial health of the business.

The preparation of a Fund Flow Statement involves the following key steps:

1. Determine the Sources and Uses of Funds:

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