Indicate the correct option as regards the sources of funds for a funds flow statement from the following 1. Increase in working capital. 2. Decrease in working capital. 3. Writing-off the intangible/fictitious assets. 4. Issuing equity shares for acquisition of a building for office. 5. Charging depreciation on fixed assets. Select the correct answer

The correct answer is A. 1, 3 and 4.

A funds flow statement is a financial statement that shows how a company’s cash and cash equivalents have changed over a period of time. It is prepared by analyzing the changes in the company’s balance sheet and income statement.

The sources of funds for a funds flow statement are the following:

• Increase in working capital: This occurs when a company’s current assets increase more than its current liabilities.
• Decrease in working capital: This occurs when a company’s current assets decrease more than its current liabilities.
• Issuing equity shares: This occurs when a company sells new shares to investors.
• Borrowing money: This occurs when a company takes out a loan from a bank or other lender.
• Selling fixed assets: This occurs when a company sells a piece of property, plant, or equipment.

The uses of funds for a funds flow statement are the following:

• Decrease in working capital: This occurs when a company’s current assets decrease more than its current liabilities.
• Increase in working capital: This occurs when a company’s current assets increase more than its current liabilities.
• Repurchasing shares: This occurs when a company buys back its own shares from investors.
• Paying off debt: This occurs when a company pays back a loan to a bank or other lender.
• Investing in fixed assets: This occurs when a company buys a piece of property, plant, or equipment.

In the question, the options are:

1. Increase in working capital.
2. Decrease in working capital.
3. Writing-off the intangible/fictitious assets.
4. Issuing equity shares for acquisition of a building for office.
5. Charging depreciation on fixed assets.

Option 1 is a source of funds because it represents an increase in a company’s current assets. Option 3 is a source of funds because it represents a decrease in a company’s intangible assets. Option 4 is a source of funds because it represents an increase in a company’s equity. Option 5 is not a source of funds because it represents an expense that reduces a company’s net income. Therefore, the correct answer is A. 1, 3 and 4.