Practice Test

Q1) The term cash includes ….. Show Answer

Q2) "Cash flow statement reveals the effects of transactions involving movement of cash". This statement is ….. Show Answer

Q3) Which of the following Accounting Standard deals with preparation of Cash Flow Statement? Show Answer

Q4) Which of the following method can be used by listed company for preparation of Cash Flow Statement? Show Answer

Q5) As per AS-3, Cash includes ….. Show Answer

Q6) As per AS-3, an investment normally qualifies as a “cash equivalent” only when it has a short maturity of, say, _____ from the date of acquisition. Show Answer

Q7) Which of the following can be categorized as cash equivalents as per AS-3? Show Answer

Q8) As per AS-3, Cash includes ….. Show Answer

Q9) Which of the following is/are cash flow from Operating Activities? Show Answer

Q10) Which of the following is / are cash flow from Investing Activities? Show Answer

Q11) Which of the following is/are cash flow from Financing Activities? Show Answer

Q12) Under Direct Method of Cash Flow Statement, starting point is ….. Show Answer

Q13) In cash How statement cash flow on account of income tax paid is shown: Show Answer

Q14) Taxes on income should be classified as: ….. Show Answer

Q15) While preparing cash flow statement as per Indirect Method which of the following is added in net profit before working capital changes to calculate cash flow from operating activities? Show Answer

Q16) The Preparation of Cash flow statement is governed by AS-3 (Revised). This statement is ….. Show Answer

Q17) A cash flow statement is like an income statement ….. Show Answer

Q18) Funds flow statement and cash flow statement are one and the same ….. Show Answer

Q19) Increase in the amount of bills payable results in ….. Show Answer

Q20) Cash from operations is equal to ….. Show Answer

Q21) Cash equivalents are short term highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Show Answer

Q22) For an investment to qualify as a cash equivalent, it must be readily convertible to a known amount of Show Answer

Q23) Non-cash transactions ….. Show Answer

Q24) Which of the following is a cash flow from a “financing” activity? Show Answer

Q25) On an accounting statement of cash flows an “increase(decrease) in cash and cash equivalents’ appears as ….. Show Answer

Q26) Which of the following is NOT a cash outflow for the firm? Show Answer

Q27) Which of the following involves a movement of cash? Show Answer

Q28) Which one of the following events will increase the cash balances of a business? Show Answer

Q29) Which one of the following is false? Show Answer

Q30) A business may incur an operating loss in a given financial year yet has more cash in the bank at the end. A reason for this could be that: ….. Show Answer

Q31) A company has a negative cash flow from operating activities. What could explain this negative cash flow? Show Answer

Q32) AS - 3 (Cash Flow Statements) requires that cash receipts and payments should be analyzed into three categories. Under which category would you expect to find the cash proceeds from a share issue? Show Answer

Q33) In AS - 3 (Cash Flow Statements) where would you find a bank current account debit balance? Show Answer

Q34) All of the following are true regarding the cash flow statement except Show Answer

Q35) All of the following are true regarding the purpose of the statement of cash flows except Show Answer

Q36) All of the following are true regarding the operating activity section of the cash How statement except ….. Show Answer

Q37) Why is the statement of cash flows useful to the analyst? Show Answer

Q38) The following items would be classified as operating activities on the statement of cash flows: ….. Show Answer

Q39) The following items would be classified as financing activities on the statement of cash flows: ….. Show Answer

Q40) What impact does depreciation have on the cash account? Show Answer

Q41) If net cash provided or used by operating, financing and investing activities are added together, the result is: ….. Show Answer

Q42) Which of the following statement is true? Show Answer

Q43) Which of the following statement is/ are false? Show Answer

Q44) Which of the following transactions would not create a cash flow? Show Answer

Q45) Which of the following would not be reported as an investing activity? Show Answer

Q46) Which of the following statements for the statement of cash flows is correct? Show Answer

Q47) Which of the following is reported as a cash flow from investing activities? Show Answer

Q48) Which statement regarding the indirect method is false? Show Answer

Q49) Which of the following transactions would be reported as a financing activity? Show Answer

Q50) Which of the following statement is/ are false? Show Answer

Q51) Which of the following would be deducted from net income when determining cash flows from operating activities under the indirect method? Show Answer

Q52) Which of the following would be added to net income when determining cash flows from operating activities under the indirect method? Show Answer

Q53) Which of the following would be deducted from net income when determining cash flows from operating activities under the indirect method? Show Answer

Q54) Which of the following transactions would increase the net cash flow from Operating Activities? Show Answer

Q55) For purposes of preparing a cash flow statement, which of the following is not considered a "cash equivalent”? Show Answer

Q56) An important distinction between the direct method and the indirect method of preparing a statement of cash flows is that: ….. Show Answer

Q57) Which of the following statement is true? Show Answer

Q58) In a statement of cash flows, the acquisition of land by issuing equity or preference shares: ….. Show Answer

Q59) Which of the following characteristics does not apply to cash equivalents? Show Answer

Q60) Which of the following would not be an adjustment to net income using the indirect method? Show Answer

Q61) If a company changes from offering 30 days' credit to customers to offering 50 days credit, which of the following statements is correct? Show Answer

Q62) Which of the following would NOT be revealed by a company’s statement of cash flows? Show Answer

Q63) Which of the following activities can increase cash flow from investing activities? Show Answer

Q64) Cash flows directly related to the production and sale of the firm's products and services are called: ….. Show Answer

Q65) Cash flows that result from debt and equity financing transactions, including incurrence and repayment of debt, cash inflows from the sale of shares, and cash outflows to pay cash dividends or repurchase shares are called: ….. Show Answer

Q66) Holding all other things constant, which of the following represents a cash outflow? Show Answer

Q67) If you are looking to review a firm’s sources and uses of cash flows over the year, the easiest place to find that information is ….. Show Answer

Q68) In order to identify the amount of funds that a firm borrowed during the preceding year, what section is the best source within the Statement of Cash Flows? Show Answer

Q69) If you start with earnings before interest and taxes and then subtract a firm's tax expense while adding back the amount of depreciation expense for the firm during the year, the resulting figure is called ….. Show Answer

Q70) In a statement of cash flows, interest payments to lenders and other creditors should be classified as a(n): ….. Show Answer

Q71) An increase in inventories of Rs. 5,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as: ….. Show Answer

Q72) Principle revenue generating activities are called as ….. Show Answer

Q73) Unrealized gains & losses from foreign exchange rates are ….. Show Answer

Q74) The statement of cash flows is: ….. Show Answer

Q75) Cash flows arising from interest and dividends received in the case of a financial enterprise should be classified as cash flows arising from ….. Show Answer

Q76) Preference shares of a company acquired shortly before their specified redemption date ….. Show Answer

Q77) When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under ….. activities and the loan element is classified ….. under activities. Show Answer

Q78) Cash flows from operating activities are: Show Answer

Q79) Cash flows arising from the purchase and sale of dealing or trading securities are classified as ….. Show Answer

Q80) Cash advances and loans made by financial enterprises are usually classified as ….. Show Answer

Q81) Cash Hows arising from transactions in a foreign currency should be recorded in an enterprise’s reporting currency by applying to the foreign currency amount the exchange rate ….. Show Answer

Q82) Extracts of cash flow statement prepared by Z Ltd. are as follows:
Cash generated from operation is Rs. 5,41,000. Income tax paid Rs. 1,80,000.
Sale of fixed assets Rs. 50,000. Voluntary separation payment paid Rs. 80,000 and Law compensation suit received is Rs. 1,25,000.
Cash flow from operating activities = ?
Show Answer

Q83) Accounts of S Ltd. shows that balance of cash and cash equivalents has been increase by Rs. 19,200 as compared to last year. If cash flow statement revels net cash inflow from financing activities is Rs. 19,200 and cash outflow from investing activities is Rs. 4,80,000.
Cash from operating activities = ?
Show Answer

Q84) From the following details calculate the cash generated from operations.
Net profit before working capital changes is Rs. 3,051 lakhs. Net increase in current assets was Rs. 3,205 lakhs, while there is net increase in current liabilities by Rs. 9 lakhs.
Show Answer

Q85) Cash flow statement of BB Ltd. shows the following position:
Cash inflows from operating activities Rs. 4,06,000, Cash outflow from investing activities Rs. 3,18,000 and Cash outflows from financing activities Rs. 18,000. Cash & cash equivalent at the end was Rs. 1,35,000.
Cash & cash equivalent at the beginning = ?
Show Answer

Q86) If opening balance of accounts receivable is Rs. 2,68,800; closing balance is Rs. 2,97,600 and total credit sales during the year was Rs. 40,32,000. What is the cash received from debtors under the direct method of cash flow statement? Show Answer

Q87) A Ltd. paid income tax on capital gains Rs. 2,16,300 resulting from disposal of fixed assets. It should be shown in: Show Answer

Q88) N Ltd. purchased machinery form Australia for A$ 50,000 on 1.10.2015. It entered into currency option contract for purchase of foreign exchange to pay for machinery and paid premium Rs. 25,000.
How will you classify such premium in the cash flow statement of N Ltd.?
Show Answer

Q89) Indian Info Line, a stock brokering firm, received Rs. 1,50,000 as premium for forward contract entered for purchase of equity shares. How will you classify this amount in the cash flow statement of the firm? Show Answer

Q90) Use the following information to calculate net cash from operating activities: cash sales Rs. 1,00,000; cash from account receivable Rs. 2,00,000; cash dividends received Rs. 3,000; dividends paid Rs. 4,000; rentpaid Rs. 5,000; and amortization expense Rs. 6,000. Show Answer

Q91) Use following information to calculate net cash from investing activities:
Sell of capital asset for Rs. 10,000 cash and a Rs. 1,000 gain; purchase a bond investment for Rs. 16,000; receive Rs. 2,000 interest payment from the bond investment; and pay off a Rs. 3,000 mortgage payable.
Show Answer

Q92) Use following information to calculate net cash from financing activities:
Issue of shares Rs. 2,00,000; repurchase a company's own shares Rs. 20,000; pay mortgage payable principal Rs. 1,00,000; pay mortgage payable interest Rs. 10,000; a stock dividend is declared and distributed that reduces retained earnings by Rs. 30,000; and a cash dividend is declared and paid that reduces retained earnings by Rs. 40,000.
Show Answer

Q93) The balance sheet reported a beginning balance of Rs. 20,000 in Accounts Receivable and an ending balance of Rs. 15,000. The income statement reported Sales Revenue of Rs. 2,00,000. Using this information, compute cash collected from customers. Show Answer

Q94) The balance sheet reported a beginning balance of Rs. 2,00,000 for the book value of equipment and an ending balance of Rs. 1,60,000. The income statement reported amortization expense of Rs. 20,000 and gain on the sale of equipment of Rs. 10,000. The cash flow statement reported acquisitions of capital assets totaling Rs. 30,000. Using this information, compute cash received from the sale of equipment. Show Answer

Q95) NSZ Ltd. paid an interim dividend of Rs. 1,00,000 along with Rs. 10,200 as corporate dividend tax. How will you classify this in the cash flow statement of the NSZ Ltd.? Show Answer

Q96) Z Ltd. income statement reported total revenues, Rs. 8,50,000 and total expenses Rs. 7,20,000 including Rs. 40,000 as depreciation. The balance sheet reported the following:
Accounts receivable - opening balance, Rs. 50,000 and ending balance, Rs. 40,000; Accounts payable - opening balance, Rs. 22,000 and ending balance, Rs. 28,000.
Therefore, based only on this information, how much was the net cash inflow from operating activities?
Show Answer

Q97) LK Ltd. issued Rs. 50,000 of bonds, paid cash dividends of Rs. 8,000, sold long-term investments for Rs. 12,000, received Rs. 5,000 of dividend revenue, purchased treasury stock for Rs. 15,000, and purchased new equipment for Rs. 19,000. What is the net cash flow from financing activities? Show Answer

Q98) Reliance Capital, a financial service company, made a loan of Rs. 1 crore during the financial year 2015-16; it will be classified as ….. Show Answer

Q99) P Ltd. reported a net loss of Rs. 10,000 for the year ended 31.12.2007. During the year, accounts receivable decreased Rs. 5,000, inventory increased Rs. 8,000, accounts payable increased by Rs. 10,000, and amortization expense of Rs. 5,000 was recorded. During 2007, operating activities ….. Show Answer

Q100) S Ltd. had an increase in inventory of Rs. 40,000. The cost of goods sold was Rs. 90,000. There was a Rs. 5,000 decrease in accounts payable from the prior period. What were S Ltd. cash payments to suppliers? Show Answer

Q101) If a company issues 1 million Rs. 1 shares at Rs. 1.30 per share, what will be the effect on the statement of cash flows? Show Answer

Q102) P Ltd. prepares its statement of cash flows using the indirect method. Its unamortized bond discount account decreased by Rs. 25,000 during the year. How should P Ltd. report the change in unamortized bond discount in its statement of cash flows? Show Answer

Q103) In a given year a company decreased its inventory by Rs. 2,50,000, purchased Rs. 3,50,000 worth of fixed assets and took on a new Rs. 5,00,000 loan. What is the net change of the company’s cash as a result of these transactions? Show Answer

Q104) State Bank of India, received a gross Rs. 1,500 Crores demand deposits from the customers and customers withdrawn Rs. 1,300 Crores of demand deposit during the financial year 2015-16. How will you
classify this amount in the cash flow statement of the firm?
Show Answer

Q105) NS Ltd. had EBIT of Rs. 5,00,000 and had a depreciation expense of Rs. 2,00,000 this last year. If the firm was subject to an average tax rate of 30%, what was NS Ltd. operating cash flow for the year? If you need to, assume that interest expense was zero. Show Answer

Q106) E & Co. had operating cash flow equal to Rs. 850 for 2014. If its earnings before interest and taxes was Rs. 1,000 while its tax bill was Rs. 300, what was E & Co. depreciation expense for the year? Show Answer

Q107) Discount and Finance House of India (DFHI) purchased Commercial Paper (CP) of Rs. 100 Crores on 28.2.2015 for 89 days maturity. This is ready market for sale/ purchase of commercial paper. While preparing cash flow for the financial year ended 31.3.2015, DHFI should show CP of Rs. 100 Crores ….. Show Answer

Q108) Dec 2014: In cash flow statement, interest received by company is classified as — Show Answer

Q109) Dec 2014: In cash flow statement, dividend paid in case of financing company is classified as — Show Answer

Q110) Dec 2014: From the following data, find the value of building sold during the year:
Particulars 313.2013 31.3.2014
Land & building 2,00,000 1,70,000
Capital reserve Nil 20,000
A piece of land has been sold during the year and the profit on sale has been credited to capital reserve. Depreciation charged on building during the year is Rs. 5,000; no additions have been made under this head during the year.
Show Answer

Q111) June 2015: In case of a financial enterprise, interest received on debentures held as investment is - Show Answer

Q112) June 2015: In case of a financial enterprise, interest received on debentures held as investment is - Show Answer

Q113) June 2015: In case of a financial enterprise, interest received on debentures held as investment is - Show Answer

Q114) June 2015: In case of a financial enterprise, interest received on debentures held as investment is - Show Answer

Q115) June 2015: As per Accounting Standard-3, cash equivalents include - Show Answer

Q116) June 2015: Cash payments to and on behalf of employees is an example of cash flow from - Show Answer

Q117) June 2015: Cash payments to and on behalf of employees is an example of cash flow from - Show Answer

Q118) June 2015: In an organization, provision for taxation as on 31 st December,
2013 was Rs. 16,000 and on 31st December,
2014 Rs. 18,000. Provision for taxation of Rs. 19,000 was made during the year 2014. The tax paid during the year is—
Show Answer

Q119) Dec 2015:
Statement-I:
In funds flow analysis, current assets and current liabilities are shown separately in a statement of changes in working capital. Statement-II:
In cash flow analysis, increases and decreases of all current accounts are adjusted in the calculation of cash flow from operating activities.
Select the correct answer from the following —
Show Answer

Q120) Dec 2015:
Assertion (A):
Cash flow statement enhances the comparability of report.
Reason (R):
Cash flow statement eliminates the effect of using different treatments for same transactions.
Select the correct answer from the following —
Show Answer

Q121) Dec 2015: Arrange the following categories of cash inflows and cash outflows in the correct order of cash flow statements:
(1) Cash flows from investing activities
(2) Cash flows from financing activities
(3) Cash flows from operating activities.
Select the correct answer from the options given below —
Show Answer

Q122) Dec 2015:
Statement-I:
According to AS-3, provision for taxation should always be treated as a non-operating charge on profits.
Statement-II:
Dividend on shares is an appropriation of profits and not a trading charge.
Select the correct answer from the following —
Show Answer

Q123) June 2016: Pride Ltd. has profit after tax Rs. 90,000, depreciation Rs. 17,000, and decrease of debtors Rs. 20,000. The cash generated from operating activities will be — Show Answer

Q124) June 2016: The purchase of machinery by issuing long-term notes payable should be reported as a — Show Answer

Q125) June 2016: Which statement contains opening as well as closing balances of cash and cash equivalents and prepared on accrual basis — Show Answer

Q126) Dec 2016: Income from investments is a cash flow from — Show Answer

Q127) Dec 2016: A cash flow statement is based upon _____ while fund flow statement recognizes _____ Show Answer

Q128) Dec 2016: Consider the following statements:
(1) Depreciation reduces tax liability; hence it is a source of funds.
(2) Decrease in current liabilities during the year results in an increase in working capital.
(3) The term cash equivalents include short-term marketable investments.
(4) Conversion of debentures into equity shares appears in funds flow state¬ment.
(5) Only non-cash expenses are added to net profit to find out funds from operation.
Select the incorrect statements from the options given below —
Show Answer

Q129) Dec 2016: Preference share capital of Rs. 5,00,000 was redeemed at a premium of 10%, partly out of proceeds of issue of 20,000 equity shares of Rs. 10 each issued at 10% premium and partly out of profits otherwise available for dividends. Choose the correct effect on different activities of cash flow statement from the options given below: Show Answer

Q130) 2017: In cash flow, income tax paid is treated as: Show Answer

Q131) June 2017: By ‘Cash Equivalents' we mean: Show Answer

Q132) June 2017: Arrange the following categories of cash inflows and cash outflows in a correct order:
(1) Cash from investing activities
(2) Cash from financing activities
(3) Cash from operating activities
Select the correct answer from the options given below —
Show Answer

Q133) Dec 2017: In case of financial enterprises, cash flows arising from ….. are classified as cash flows from operating activities. Show Answer

Q134) Dec 2017: Both cash flow statement and fund flow statement are: Show Answer

Q135) June 2018: Which of the following involves a movement of cash? Show Answer

Q136) June 2018: The following item would be classified as operating activities in the statement of cash flows: Show Answer

Q137) June 2018: When the instalment paid in respect of a fixed asset acquire on deferred payment basis includes both interest and loan, the interest element is classified under ….. activities and the loan element is classified under ….. activities. Show Answer

Q138) June 2018: In cash flow statement, proceeds from sales of an asset will be considered as: Show Answer

Q139) June2018:Which one of the following is false? Show Answer

Q140) Dec 2018: In case of financial enterprises, cash flow arising from interest and dividends should be classified as cash flow from: Show Answer

Q141) Dec 2018: Investments at the beginning and at the end of the year 2017-18 were Rs. 255 Lakh and Rs. 210 Lakh respectively. During the year 40 per cent of original investments were sold at a profit of Rs. 63 Lakh. Amount of cash inflow and outflow respectively from Investments will be: Show Answer

Q142) June 2019: The following information of a non-financial enterprise is given:
Purchase of fixed assets Rs. 40,000; Proceeds from sale of equipments Rs. 35,000; Interest received Rs. 3,000; Interest paid Rs. 6,000, Dividend received Rs. 4,000 and Dividend paid Rs. 15,000. Amount of cash from investing activities will be -
Show Answer

Q143) June 2019: PQR Ltd. have the following balances:
Investment at the end of the year 2017- 18 Rs. 85,000, Investment at the end of the year 2018-19 Rs. 70,000. During the year the company had sold 40% of its original investment at a profit of 50%. What will be the amount o fcash inflow and cash outflow from the investment:
Show Answer

Q144) Net profit for year = Rs. 2,00,00,000
Number of equity shares outstanding are 40,00,000.
Number of 11% convertible debentures of Rs. 100 each = 50,000 (Each debenture is convertible into 8 equity shares)
Tax rate = 30%
Diluted EPS = ?
Show Answer

Q145) Z Ltd. had 12,00,000 equity shares on 1.4.2012. It earned a profit of Rs. 30,00,000 during the year 2015-2016. The fair value of share is Rs. 25. The company has given Share Option to its employees of 2,00,000 equity shares at an option price of Rs. 15. Calculate diluted EPS.
Show Answer

Q146) leevan Ltd. earned a net profit after tax of Rs. 90,00,000 during the year ended 31.3.2012. The company's equity capital is 10,000 shares of Rs. 10 each. The company has also issued 5,000, 20% convertible debentures of Rs. 20 each, convertible into shares at par. Compute diluted EPS as per AS-20, assuming income tax rate at 30%. Show Answer

Q147) Net profit for year = Rs. 83,00,000 Number of equity shares outstanding are 20,00,000.
Number of 10% convertible debentures of Rs. 100 each = 1,00,000 (Each debenture is convertible into 8 equity shares)
Interest expense = Rs. 10,00,000
Tax rate - 30% Diluted EPS = ?
Show Answer

Q148) Cash flow statement is required for the financial planning of — Show Answer

Q149) In cash flow statement, dividend paid in case of financing company is classified as — Show Answer

Q150) Which of the following results into decrease in working capital — Show Answer

Q151) In cash flow statement, interest received by company is classified as- Show Answer

Q152) In case of a financial enterprise, interest received on debentures held as investment is — Show Answer

Q153) As per Accounting Standard - 3, cash equivalents include — Show Answer

Q154) Cash payments to and on behalf of employees is an example of cash flow from — Show Answer

Q155) Statement-1:
In funds flow analysis, current assets and current liabilities are shown separately in a statement of changes in working capital.
Statement-11:
In cash flow analysis, increases and decreases of all current accounts are adjusted in the calculation of cash flow from operating activities. Select the correct answer from the following-
Show Answer

Q156) Assertion (A):
Cash flow statement enhances the comparability, of report.
Reason (R)
Cash flow statement eliminates the effect of using different treatments for same transactions.
Select the correct answer from the following-
Show Answer

Q157) Statement -1:
According to AS-3, provision for taxation should always be treated as a non -operating charge on profits.
Statement-II
Dividend on shares is an appropriation of profits and not a trading charge.
Select the correct answer from the following-
Show Answer

Q158) ............. are necessary for the study of trends and direction of movements in the financial position and operating results of a concern. Show Answer

Q159) Current ratio is 2.5 and liquid ratio is 1.5. Working capital is Rs. 75,000. Value of the stock held will be — Show Answer

Q160) Which statement contains opening as well as closing balances of cash and cash equivalents and prepared on accrual basis: Show Answer

Q161) The purchase of machinery by issuing long-term notes payable should be reported as a: Show Answer

Q162) Income from investments is a cash flow from: Show Answer

Q163) A company has annual sales ofRs. 150 lakhs entirely on credit. It keeps an average inventory sufficient to meet sales demand for half a month and gives its customer one month credit. Its average current liabilities areRs. 10 lakhs. The company must maintain cash and bank balance to have current ratio of 2.
The amount of cash balance will be -
Show Answer

Q164) Which of the following is not a limitation of financial statements - Show Answer

Q165) In the management information system (MIS), top level management uses Show Answer

Q166) A cash flow statement is based upon ............. while fund flow statement recognises ............. Show Answer

Q167) In cash flow, income tax paid is treated as: Show Answer

Q168) By ‘Cash Equivalents’ we mean: Show Answer

Q169) Net Profit+Non-Cash expenses = Show Answer

Q170) Arrange the following categories of cash inflows and cash outflows in a correct order:
(1) Cash from investing activities
(2) Cash from financing activities
(3) Cash from operating activities Codes:
Show Answer

Q171) In case of financial enterprises, cash flows arising from ............. are classified as cash flows from operating activities. Show Answer

Q172) Both cash flow statement and fund flow statement are : Show Answer

Q173) While analyzing the opening and closing balance sheet of a company the following are observed:
Total increase in current assets Rs. 20,000 Total increase in current liabilities Rs. 80,000 Total decrease in current assets Rs. 1,30,000 Total decrease in current liabilities Rs. 30,000 The net change in working capital is :
Show Answer

Q174) Which of the following involves a movement of cash? Show Answer

Q175) The following items would be classified as operating activities in the statement of cash flows: Show Answer

Q176) When the installment paid in respect of a fixed asset acquire on deferred payment basis includes both interest and loan, the interest element is classified under ............. activities and the loan element is classified under ............. activities. Show Answer

Q177) In cash flow statement, proceeds from sales of an asset will be considered as Show Answer

Q178) Which one of the following is false? Show Answer

Q179) In a cash flow statement there is no place for Show Answer

Q180) SKY LTD. purchased a special machinery from Earth Ltd. for Rs. 50 Lakhs in consideration of 50,000 equity shares of Rs. 100 each of the company. Where this transaction will be reflected in the Cash Flow Statement as per AS-3? Show Answer

Q181) As per AS-3 (Revised) Interest and Dividends received in the case of a manufacturing enterprise should be classified as cash flow from Show Answer

Q182) Which of the following items is not a part of cash flow from operating activities? Show Answer

Q183) While preparing Cash Flow Statement of XY Ltd., a finance company, interest received on loans should be shown as Show Answer

Q184) Which of the following is not a component of Cash Flow Statement? Show Answer

Q185) In a cash flow statement there is no place for Show Answer

Q186) According to AS-28, estimates of future cash flow should not include Show Answer

Q187) In which schedule of Companies Act, 2013, requirements of Balance Sheet of a company are mentioned: Show Answer

Q188) In which schedule of Companies Act, 2013 requirements of Profit and Loss Account of a company are mentioned: Show Answer

Q189) Dividends can be declared out of: Show Answer

Q190) After declaration, all dividends must be paid within: Show Answer

Q191) Interim dividend is declared by: Show Answer

Q192) In case of only one Managing director in the company, his remuneration can not be more than: Show Answer

Q193) Cash flows arising from interest paid in the case of a financial enterprise is a cash flow from Show Answer

Q194) Interest and dividends received in the case of a manufacturing enterprise should be classified as cash flow from Show Answer

Q195) If net profit is taken as the basis to ascertain cash flow from operations, which one of the following adjustments is correct and proper? Show Answer

Q196) The conversion of debt to equity : Show Answer

Q197) The cash flows associated with extraordinary items should be separately classified as a cash flow from: Show Answer

Q198) Cash payment to suppliers of inputs and services used should be separately classified as cash flow from : Show Answer

Q199) Cash receipts from sale of fixed assets should be classified as a cash flow from : Show Answer

Q200) Cash proceeds from issuing debentures should be classified as a cash flow from : Show Answer

Q201) ‘Cash receipts from sale of goods and services’ should be classified as a cash flow from : Show Answer

Q202) Which of the following items would be subtracted from net income when using the indirect method of calculating cash flows provided by operating activities? Show Answer

Q203) Which of the following would be considered a cash-flow item from a “financing” activity? Show Answer

Q204) The method for presenting Net cash provided by operating activities that starts with net income and adjusts it for items that affected reported net income but that did not affect cash is called the ? Show Answer

Q205) Cash paid for preferred stock dividends should be shown on the statement of cash flows under? Show Answer

Q206) Which of the following would not be considered a cash flow from '“operating” activities? Show Answer

Q207) In the long run, a business must generate positive net cash flow from which of the following activities, if it is to survive ? Show Answer

Q208) Depreciation is added back to profit when arriving at the cash flow from operating activities because? Show Answer

Q209) A company purchased the land in exchange for the capital stock; it would affect which of the following? Show Answer

Q210) Which of the following would not represent the cash outflows for the business? Show Answer

Q211) The statement of cash flows does not include cash inflows and outflows for which of the following activities? Show Answer

Q212) The primary purpose of the statement of cash flows is to ? Show Answer

Q213) If a company purchased treasury stock with cash, this would be reported on the statement of cash flows as? Show Answer

Q214) When equipment is sold for cash, the amount received is reflected as cash ? Show Answer

Q215) Which of the following is not an example of cash equivalents? Show Answer

Q216) Which of the following cash flows results from an operating activity? Show Answer

Q217) Which of the following cash flows results from a financing activity? Show Answer

Q218) Which of the following cash flows results from a financing activity? Show Answer

Q219) The two approaches to reporting cash flows provided by operating activities are ? Show Answer

Q220) In preparing cash flows provided by operating activities using the indirect method, which of the following items is added to net income? Show Answer

Q221) Which of the following would be considered an investing activity and a source of cash ? Show Answer

Q222) Which of the following would be consistent with a more aggressive approach to financing working capital ? Show Answer

Q223) Which of the following illustrates the use of a hedging (or matching) approach to financing? Show Answer

Q224) Write the most appropriate answer from the given options in respect of the following:
Cash flow statement is required for the financial planning of Show Answer

Q225) The net profit of A Ltd. amounted to 40,000.
Particulars -Amount (RS)
Provision of income-tax =33,000,
Depreciation=6,500,
Preliminary expenses written-off=1,500,
Bad debts=500,
Loss on sale of furniture=2,500,
Discount allowed to customers=1,900,
Discount received from trade creditors=1,400.
After considering the above information, find out the funds from operation - Show Answer

Q226) In cash flow statement, dividend paid in case of financing company is classified as -
Show Answer

Q227) Which of the following results into decrease in working capital - Show Answer

Q228) In cash flow statement, interest received by company is
classified as-
Show Answer

Q229) In case of a financial enterprise, interest received on debentures held as investment is - Show Answer

Q230) As per Accounting Standard - 3, cash equivalents include - Show Answer

Q231) Cash payments to and on behalf of employees is an example of cash flow from - Show Answer

Q232) In case of a financial enterprise, interest received on debentures held as investment is. - Show Answer

Q233) As per Accounting Standard - 3, cash equivalents include - Show Answer

Q234) Cash payments to and on behalf of employees is an example of cash flow from - Show Answer

Q235) Net profit before working capital changes of Super Ltd. is 4,35,000. Changes in working capital during the year are as follows:
Decrease in stock=2,58,000,
Decrease in bills payable=8,400,
Increase in bills receivable=38,800,
Increase in prepaid expenses=2,500,
Increase in outstanding expenses=7,800.
Cash generated from operation for Super Ltd. will be
Show Answer

Q236) Which of the following does not result into inflow of funds in case of fund flow statement Show Answer

Q237) In an organization, provision for taxation as on 31st December, 2013 was Rs 16,000 and on 31st December, 2014 Rs 18,000. Provision for taxation of Rs 19,000 was made during the year 2014. The tax paid during the year is - Show Answer

Q238) Which of the following statement is not true - Show Answer

Q239) Statement-1:
In funds flow analysis, current assets and current liabilities are shown separately in a statement of changes in working capital.
Statement-2:
In cash flow analysis, increases and decreases of all current accounts are adjusted in the calculation of cash flow from operating activities.
Select the correct answer from the following-
Show Answer

Q240) Assertion(A):
Cash flow statement enhances the comparability of report.
Reason (R):
Cash flow statement eliminates the effect of using different treatments for same transactions.
Select the correct answer from the following-
Show Answer

Q241) Assertion (A):
Funds are not related to working capital
Reason (R):
Flow of funds takes place whenever there is change in the funds. Select of correct answer from the following- Show Answer

Q242) Arrange the following categories of cash inflows and cash outflows in the correct order of cash flow statements:
(1) Cash flows from investing activities
(2) Cash flows from financing activities
(3) Cash flows from operating activities
Select the correct answer from the options given below- Show Answer

Q243) Statement - 1:
According to AS-3, provision for taxation should always be treated as a non-operating charge on profits.
Statement-2:
Dividend on shares is an appropriation of profits and not a trading charge. Select the correct answer from the following-
Show Answer

Q244) Which statement contains opening as well as closing balances of cash and cash equivalents and prepared on accrual basis: Show Answer

Q245) If provision for taxation is treated as a current liability, then payment of tax is: Show Answer

Q246) Pride Ltd. has profit after tax Rs 90,000, depreciation Rs 17,000, and decrease of debtors Rs 20,000. The cash generated from operating activities will be: Show Answer

Q247) A company reported current year profit as Rs 70,000 after
the following adjustments:
Loss on sale of equipment : Rs 9000,
Premium on debenture redemption : Rs 1500,
Tax provision : Rs 22000,
Dividend income : Rs 4000,
Profit on revaluation of fixed asset : Rs 2500.
The amount of fund from operations will be: Show Answer

Q248) The purchase of machinery by issuing long-term notes
payable should be reported as a: Show Answer

Q249) Balance of investment account is Rs 20,000 on 31st March, 2014 and Rs 30,000 on 31st March, 2015. As per additional information, dividend received Rs 3,000 includes Rs 1,000 from per-acquisition profit which is credited to investment account. The amount of investment purchased/ sold during the year 2014-15 is:
Show Answer

Q250) Consider the following statements:
(1) Depreciation reduces tax liability, hence it is a source of funds.
(2) Decrease in current liabilities during the year results in an increase in working capital.
(3) The term cash equivalents includes short-term marketable investments.
(4) Conversion of debentures into equity shares appears in funds flow statement.
(5) Only non-cash expenses are added to net profit to find out funds from operation.
Select the incorrect statements from the options given below- Show Answer

Q251) A company reported current year profit of 12,00,000 which includes the following:
Profit on sale of equipment: Rs 2,00,000
Share issue expenses: Rs 1,50,000
Dividend income: Rs 80,000,
Tax: Rs 90,000,
Profit on revaluation of fixed assets (PPE) : Rs 2,50,000
he amount of funds from operation will be:
Show Answer

Q252) Income from investments is a cash flow from: Show Answer

Q253) Profit on sale of machinery should be _____ from the net profit to get funds from operations. Show Answer

Q254) By 'Cash Equivalents' we mean: Show Answer

Q255) Net Profit+Non-Cash expenses = Show Answer

Q256) Arrange the following categories of cash inflows and cash outflows in a correct order:
Cash from investing activities (2) Cash from financing activities
(3) Cash from operating activities Show Answer

Q257) In case of financial enterprises, cash flows arising from ________ are classified as cash flows from operating activities. Show Answer

Q258) Both cash flow statement and fund flow statement are : Show Answer

Q259) In fund flow statement, flow of fund will occur when a transaction is happened between : Show Answer

Q260) While analyzing the opening and closing balance sheet of
a company the following are observed:
Total increase in current assets Rs 20,000
Total increase in current liabilities Rs 80,000
Total decrease in current assets Rs 1,30,000
Total decrease in current liabilities Rs 30,000
The net change in working capital is : Show Answer

Q261) The following items would be classified as operating activities in the statement of cash flows: Show Answer

Q262) When the installment paid in respect of a fixed asset acquire on deferred payment basis includes both interest and loan, the interest element is classified under ____ activities and the loan element is classified under ______ activities. Show Answer

Q263) In cash flow statement, proceeds from sales of an asset will
be considered as: Show Answer

Q264) Working capital will not change if there is: Show Answer

Q265) In the case of financial enterprises, cash flows arises from interest paid should be classified as cash flow from: Show Answer

Q266) Mithu Ltd. had the investment as on 31-3-18 and 31-3-19 were ₹ 10,95,000 and ₹ 10,82,000 respectively. During the year interest on investment received ₹ 77,000 which was used in writing down the book value of investments. If there were some purchases of investment, then the cash flow from investment and from interest would be: Show Answer

Q267) Pooja Ltd. had the investment of 68 lakh as on 31st March, 2018 and that of 81 lakh as on 31st March, 2019. During the year the company had sold 30% of its original investment at a profit of 9,60,000. The cash inflow and outflow from investment will be: Show Answer

Q268) On 31st March, 2019, X Ltd. has 8% fixed Deposit (Date of FD 1st March, 2019, maturing on 31st May, 2019) of 3,00,000. Interest is received on monthly basis. While preparing Cash Flow Statement as per AS-3: Show Answer

Q269) Which of the following is not a cash flow for a company? Show Answer

Q270) Cash payments to and on behalf of employees is an example of Show Answer

Q271) In case of a financial enterprise. Interest received on Debentures held as Investment is Show Answer

Q272) For the purpose of Cash Flow Statement, 'Cash Equivalents' include: Show Answer

Q273) A Company has a Net Cash Sale of Rs 6,00,000,Cash Expenses Rs 2,80,000 and Depreciation Rs 50,000. Cash from Operating Activity should be: Show Answer

Q274) Cash Inflow before working capital changes is ₹ 4,80,000, decrease in inventory is ₹ 60,000 increase in receivables position is ₹ 80,000 and increase in payables position is 70,000, then cash flow from operating Show Answer

Q275) Debentures interest paid is 80,000. Proposed dividend on equity shares is 1,50,000, Preference dividend paid is 1,20,000, Provision
for tax is 90,000, then cash outflow from financing activity is: Show Answer

Q276) Cash flows arising from the purchase and sale of dealing or trading securities are classified as: Show Answer

Q277) The net profit after tax for the year was Rs 30,00,000. Working capital increased during the year by Rs 5,00,000. Depreciation for the year was Rs 5,00,000 and tax expenses was Rs 7,50,000. Amount paid towards income tax based on self-assessment and demand from tax department for earlier year was Rs 10,00,000. Cash flow from operating activities is:
Show Answer

Q278) Interest payment by non-financial enterprises is classified as:
Show Answer

Q279) Which of the following is not an investing cash flow? Show Answer

Q280) MN Ltd. reported income tax expenses of 6,10,000 on its income statement for the year ended on 31st March 2020. The comparative balance sheet of the company showed that income tax payable on 31st March 2019 and 31st March 2020 was 80,000 and 1,30,000 respectively. Based on the above information, cash payment for the income tax during the year ended on 31st March 2020 was: Show Answer

Q281) The land account was debited by Rs 60,00,000 and credited by Rs 25,00,000 during the current year. The income statement reported a profit on sale of land in the amount of Rs 2,00,000. All transactions related to land account were cash transactions. These transactions would be shown in the statement of cash flow as: Show Answer

Q282) Debenture interest paid is 1,20,000, Provision for taxation is 1,10,000, Preference share dividend paid is 80,000, Proposed dividend on equity shares is 1,80,000, then the Cash Flow from Financing Activities
Show Answer

Q283) Plant and machinery original costing Rs 13,55,000 (accumulated depreciation Rs 7,28,000) was sold at a profit of Rs 1,59,000 during the year 2019-20. The amount of cash flow from this transaction would be: Show Answer

Q284) Z Ltd. had the investment of 34 lakh as on 31st March, 2020 and that of 40.50 lakh as on 31st March, 2021. During the year the company sold 30% of its original investments at a profit of 4.80 lakh. The Cash Inflow and Cash Outflow from the investment are : Show Answer

Q285) Cash inflow before working capital changes is Rs 12,00,000, decrease in inventory is Rs 1,50,000, increase in receivables position is Rs 2,00,000 and increase in payables position is Rs 1,75,000, then Cash Flow from Operating Activities is : Show Answer

Q286) X Ltd. has a cash sales of Rs 15,00,000. Cash expenses are Rs 7,00,000 and depreciation Rs 1,25,000. Cash from Operating Activities of the company is : Show Answer

Q287) In cash of financial enterprises, cash flows arise from interest paid should be classified as cash flow from: Show Answer

Q288) Net profit + Non-cash expenses = Show Answer

Q289) While preparing cash flows statement of XY ltd, a finance company, interest received on loans should be shown as Show Answer

Q290) Cash receipts from sale of fixed assets (PPE) should be classified as a cash flow from: Show Answer

Q291) Permanent working capital Show Answer