Cash Flow Statement MCQs

Q1 | In case of other enterprises cash flow arising from interest paid should be classified as cash flow from________ while dividends and interest received should be stated as cash flow from ____.

operating activities, financing activities

financing activities, investing activities

investing activities, operating activities

none of the above

Q2 | When a fixed asset is bought as hire purchase, interest element is classified under ______ and loanelement is classified under________.

operating activities, financing activities

financing activities, investing activities

investing activities, operating activities

none of the above

Q3 | Which of the following statements are false?

old furniture written off doesn’t affect cash flow.

cash flow statement is a substitute for cash account.

appropriation of retained earnings is not shown in cash flow statement.

net cash flow during a period can never be negative.

Q4 | Which of the following is not a cash outflow?

increase in prepaid expenses

increase in debtors

increase in stock

increase in creditors

Q5 | Cash flow statement is prepared for financial planning of

long range

medium range

short range

very long range

Q6 | Which of the following is source of cash?

cash deposited into bank

cash withdrawn from bank

sale of goods costing ₹10,000 for ₹8,000

sale of marketable securities for cash

Q7 | Which of the following is not source of cash?

issue of shares

purchase of machinery

sale of asset

dividend received

Q8 | Which of the following is not application of cash?

increase in debtors

increase in inventory

increase in bills payable

increase in prepaid expenses

Q9 | If 6% Pref. share capital ₹2,00,000 were redeemed at a premium of 5%, while preparing Cash FlowStatement its effect on cash flow will be :

cash used from financing activities ₹2,12,000

cash received from financing activities ₹2,12,000

cash used (payment) from financial activities ₹2,10,000

cash used (payment) from financial activities ₹2,00,000

Q10 | If the amount of goodwill is ₹40,000 at the beginning of a year and ₹48,000 at the end of that year thenwhile preparing cash flow statement its effect on cash flow will be :

cash used (payment) in investing activities ₹8,000

cash received from operating activities ₹8,000

cash used (payment) from operating activities ₹8,000

cash used (payment) from financial activities ₹8,000

Q11 | How will you deal increase in the balance of ‘Securities Premium Reserve’ while preparing a Cash FlowStatement?

cash flow from operating activities