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InterviewSolution
This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Dividend paid by a manufacturing company is classfied under which kind of activity while perparing cash flow statement ?A. Cash Flow from Operating ActivitiesB. Cash Flow from Investing ActivitiesC. Cash flow from Financing ActvitiesD. No Cash Flow |
| Answer» Correct Answer - C | |
| 2. |
How will you Bank Overdraft in a Cash Flow Statement ?A. Cash Flow from Operating ActivitiesB. Cash Flow from Investing ActivitiesC. Cash flow from Financing ActvitiesD. Cash Equivalent |
| Answer» Correct Answer - C | |
| 3. |
Cash deposit with the bank with a maturity date after two months belongs to which of the following in the cash flow statement ?A. Investing activitiesB. Financing activitiesC. Cash and Cash equivalentsD. Operating activities |
| Answer» Correct Answer - C | |
| 4. |
Identify Financing Activities out of the following transactions: 1. Purchase of securities of a company, 2. Brokerage paid for the above purchaves 3. Sale of securities of a company: 4. Dividend and interest received on securities 5. Dividend paid to the shareholders, 6. Interest paid on borrowings 7. Loans and advances made, and 8. Receipt of loans and advances made. |
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Answer» 1.Dividend paid to the Shareholders: It is a financing activity as dividend is paid on the Share Capital of the company. Share Capital is to be shown as Financing Activity as per AS-3 (Revised), Cash Flow Statement. 2. Interest paid on Borrowings: Borrowings are shown as Financing Activity as per AS-3 (Revised), Cash Flow Statement. Interest is related to borrowings, therefore, it will also be shown as Financing Activity. |
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| 5. |
State which of the following would result in inflow or outflow or no flow of Cash and Cash Equivalenes (a) Sale of Fixed Assets, Book Value ₹1,00,000 at a profit of ₹ 10,000 (b) Sale of goods against cash. (c) Purchase of machinery for cash. (d) Purcahase of machinery for cash. (e) Issued fully paid Bonus shares. (f) Cash withdrawn forn bank. (g) Payment of Interim dividend. (h) Proposed Dividend. |
| Answer» Correct Answer - Inflow ;(a), (b); Outflow:(c),(g); No flow: (d),(e), (f),(h). | |
| 6. |
Which of the following item is considered as Cash Equivalents?A. Marketable SecuritiesB. DebtorsC. InvestmentD. Bills of Exchange |
| Answer» Correct Answer - A | |
| 7. |
Which of the following is considered as Cash Equivalents?A. Bank deposits for 2 monthsB. Commercial PapersC. Trreasury BillsD. All of the above |
| Answer» Correct Answer - D | |
| 8. |
Which of the following item is not considered as Cash Equivalents?A. Short term Deposits in BankB. Commercial PapersC. Trreasury BillsD. Investment |
| Answer» Correct Answer - D | |
| 9. |
From the following Balance Sheets of JY Ltd., March 2017, prepare a Cash Flow Statement : . |
| Answer» Correct Answer - Cash Flow from Operting Activities = ₹ 2,52,000; Cash Used in Investing Activities = ₹ 3,12,000; Cash Flow from Financing Activities = ₹ 85,000; Net Increase in Cash and Cash Equivalents = ₹ 25,000. | |
| 10. |
Following are the Balance Sheets of Krishtec Ltd., for the years 31st March 2012 and 2011. Perpare a Cash Flow Statement after taking into account the following adjustments: (a) The company paid interest ₹ 36,000 on its long-terms brrowings. (b) Depreciation charged on tangible fixed assets was ₹ 1,20,000. |
| Answer» Correct Answer - Cash Used in Operating Activities = ₹ 4,20,000; Cash Flow From Financing Activities= ₹ 4,54,000; Net Decrease in Cash and Cash Equivalents = ₹ 30,000. | |
| 11. |
From the following Balance Sheet of Kumar Ltd., as 31st Marach, 2019, prepare Cash Flow Statement: Additional Information: 1. During the year, a machinery costing ₹ 20,000 was sold ₹ 6,000. 2. Dividend paid during the years ₹ 50,000. |
| Answer» Correct Answer - Cash Flow from Operating Activities = ₹ 5,58,000; Cash Used in Investing Activities = ₹ 5,14,000; Cash Flow From Financing Activities Activities =₹ 2,56,000; Net Increase in Cash and Cash Equivalents = ₹ 3,00,000. | |
| 12. |
The Balance Sheet of Virendra Paper Ltd., as at 31st March, 2019 is given belown. Additional Information: 1. Interim Dividend of ₹75,000 has been paid during the years. 2. Debenture Interest paid during the years ₹ 27,000. You are requied to perapare Cash Flow Statement . |
| Answer» Correct Answer - Cash Flow from Operating Activities = ₹ 2,82,000; Cash Used in Investing Activities = ₹ 90,000; Cash Used in Financing Activities = ₹ 1,62,000; Net Increase in Cash and Cash Equivalents = ₹ 30,000. | |
| 13. |
Following the following Balance Sheet of Akash Ltd., as on 31st March 2014: Additional Information: (i) Tax paid during the year amounted to ₹ 16,000. (ii) Machine with a net boo value of ₹ 10,000.(Accumulated Depreciation ₹ 40,000) was sold for ₹2,000. Perpare Cash Flow statement . |
| Answer» Correct Answer - Cash Flow from Operating Activities = ₹ 1,96,000; Cash Used in Investing Activities = ₹ 3,68,000; Cash Flow from Financing Activites = ₹ 1,77,000; Net Increase in Cash and Cash Equlvalents = ₹ 5,000. | |
| 14. |
Identify the transactions as belonging to(i ) Operating Activities, (i) investing Activities, (iii) Financing Activities and (v) Cash and Cash Equivalents: (a) Cash Sale of Goods. (b) Cash Received against Revenue from Services rendered (C ) Cash Purchase of Goods (d) Cash Paid against Services Taken (e ) Patents Purchased (f) Marketable Securities (g) Bank Overdraft (h) Proceeds from Issue of Debentures (i) Purchase of Shares (j) Repayment of Long-term Loan (k) Commission Received (l) Redemption of Debentures (m ) Interet on Debenture (n) interest on Investments (o) Icome Tax Paid (p) Income Tax Paid on Gain of Sale of Asset (q) Cash Received from Debtors (r) Cash Paid to Creditors. |
| Answer» Correct Answer - Operating Activities :(a),(b),(c),(d),(k),(o),(q),(r); Investing Activities (e),(i),(n) ,(p) ; financing Activities : (g),(h),(j),(I),(m); Cash and Cash Equivalents : (f). | |
| 15. |
State any two objectives of preparing Cash Flow Statement |
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Answer» 1 – The Explanation for the Changes in Cash : The first purpose/objective of Statement of cash flow is to provide a detailed description of how and in what amounts the cash is flowing in and flowing out of the firm. More than that it explains how the cash was generated and how it was used further during a particular accounting period. 2 – Information about Non-Cash Investing and Financing Activities : The second important purpose of Statement of cash flow is to provide a description of how much money was used in non-core activities like investing and financing activities. These activities even though non-core have a significant effect on the current and future cash flows of the firm. |
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| 16. |
Followimg are the Balance Sheet of Solar Power Ltd., as at 31st March, 2014 and 2013. Additional Information: During the year, a piece of machinery costing ₹ 48,000 on which accumulated depreciation was ₹ 32,000 was sold for ₹ 12,000. Perpare Cash Flow Statement. |
| Answer» Correct Answer - Cash Flow form Operating Activities = ₹ 3,06,000 ;Cash Used in Investing Activites = ₹ 5,76,000; Cash Flow from Financing Activities = ₹ 3,40,000 ; Net Inecrease in Cash and Cash Equivalents = ₹70,000. | |
| 17. |
Welprint Ltd has given the following information : `{:(,,"₹"),(,"Machinery as on 1st April, 2018", "50,000"),(,"Machinery as on 31st March, 2019","60,000"),(,"Accumulated Depreciation 1st April, 2018","25,000"),(,"Accumulated Depreciation on 31st March, 2019","15,000"):}` During the years costing ₹ 25,000 (accumulted deprection thereon ₹ 15,000) was sold for ₹ 50,000. Caculate Cash Flow from Investing Activites on the basis of the above information. |
| Answer» Correct Answer - Cash Used in Investing Activities = ₹ 22,000 | |
| 18. |
XYZ Ltd provided the following information calculate Net Cash Flow Finacing Activites: Additional Information: 1. Interest paid on debentures ₹ 19,000. 2. Divident paid on the year ₹ 50,000. 3. During the year, XYZ Ltd. issued bonus share in the ratio of 5:1 by capialising reserve. |
| Answer» Correct Answer - Cash Flow from Financing Activities = ₹ 31,000. | |
| 19. |
Computer Cash Flow from Operating Activities form the following: (i) Profit for the year ended 31st March, 2019 is ₹ 10,000 after providing for deprecting of ₹ 2,000. (ii) Current Assest and Current Liabilites of the business for the year ended 31st March 2018 and 2019 are as follows. |
| Answer» Correct Answer - Cash Flow Operating Activites = ₹ 7,700. | |
| 20. |
Charles Ltd. Earned a profit of ₹ 1,00,000 after charging deprection of ₹ 20,000 on asset and a transfer to Grenral Reserve of ₹ 30,000.Goodwill amortised was ₹ 7,000 and gain on sale of machinergy was ₹ 3,000.Other information available is (charge in the vaule of Current Assets and Current Assets and Current Liabilites): trade recivedles showed an increase of ₹ 3,000, trade payable an increased of ₹ 6,000, Prepaid expenses an increase of ₹ 200, and outstanding expenses a decrease of ₹ 2,000. Ascertain Cash Flow from Operating Activites . |
| Answer» Correct Answer - Cash Flow Operating Activites = ₹ 1,54,800; Net Profit before Tax = ₹ 1,30,000 | |
| 21. |
Calculate Cash Flow from Operating Activites from the following. (i) Profits for the year is ₹ 7,00,000 after considering the following item: |
| Answer» Correct Answer - Cash Flow Operating Activites = ₹ 6,98,000 | |
| 22. |
Calculate Cash Flow from Operating Activites form the following information: |
| Answer» Correct Answer - Cash Flow Operating Activites = ₹ 10,10,000 | |
| 23. |
Grand Hosiptality Ltd., reported Net Profit after Tax of ₹ 6,40,000 for the year ended 31 st March , 2019. The relevant extract from Balance Sheet as at 31st March , 2019is : Deprecition chaged on Plants and Machinery ₹ 55,000, insurance claim recevied ₹ 50,000, gain(profit) on sale of investment ₹ 20,000 appered in the Statment of Profit and Loss for the yreas for the years ended 31st March, 2019. Calculate Cash Flow from Operating Activited. |
| Answer» Correct Answer - Cash Flow Operating Activites = ₹ 6,66,000 | |
| 24. |
Calculate Net Profit before Tax and Extraordinry Items of Perimer Sales Ltd. From its Balance Sheet as at 31st March, 2019: Additional Divided for the years ended 31st March , 2018 and 2019 are ₹ 75,000 respectively. (ii) Interim Dividend paid during the year was ₹ 10,000 |
| Answer» Correct Answer - Net Profit before Tax and Extraording Items = ₹ 1,65,000 | |
| 25. |
Following is the extract from the Balance sheet of Zee Ltd. Additional Infromation: (i) Proposed divided on equity Share for the years 2017-18 and 2018-19 are ₹1,60,000 and ₹2,00,000 respectively. (ii) An Interim Dividend of ₹40,000 on Equity Shares was paid. Calculate Net Profit before Tax and Extrodinry Items. |
| Answer» Correct Answer - Net Profits before Tax and Extraordinary Items = ₹ 5,80,000 | |
| 26. |
From the following information, calculate Cash Flow form Investing Activites: A buliding was purcahsed as investment out of surplus which was let out for commercial purpose Rent recived ₹ 20,000. |
| Answer» Correct Answer - Cash Used in Investing Activities = ₹ 3,45,000 | |
| 27. |
Form the following Balance Sheets and information of Volvo Ltd., perpare Cash Flow Statement . Additional Information: (ii) A machine with a book value of ₹ 20,000 was sold for ₹ 12,500. (iii) Depreciation charged during the year was ₹ 35,000. (iv) Perfernce shars were redeemed on 31 st March, 2018 at a permium of 5%. (v) An interim divided of ₹5,000 was paid on equity shars on 31st March , 2019 out General Reserve, (vi) Fresh equity shares were issued on 31st March , 2019, and (vii) Additional investments were purchased on 31st March, 2019. |
| Answer» Correct Answer - Cash Flow fom Operating Activites = ₹ 1,35,000 ; Cash Used in Investing Activites = ₹ 1,21,000; Cash Flow from Financing Financing Activites = ₹ 500; Net Increse in Cash and Cash Equivalents = ₹ 500; | |
| 28. |
From the following Balance Sheets of Tiger Super Steel Ltd., prepare Cash Flow Statement: Additional Information: Depreciation Charge on Land & Building Rs 20,000, and Plant Rs 10,000 during the year. |
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Answer» Cash flow from Operating Activities Rs 56,000 Cash flow from Investing Activities Rs (60,400) Cash flow from Financing Activities Rs 8,800]. |
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| 29. |
From the following information, prepare cash flow statement: Additional Information: Depreciation Charge on Plant amount to Rs 80,000. |
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Answer» Cash inflow from Operating Activities 4,28,000 Cash inflow from Investing Activities (2,80,000) Cash inflow from Financing Activities (48,000). |
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| 30. |
From the following information, prepare cash flow statement: Additional Information: Depreciation Charge on Plant amount to Rs 80,000. |
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Answer» Cash inflow from Operating Activities 4,28,000 Cash inflow from Investing Activities (2,80,000) Cash inflow from Financing Activities (48,000). |
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| 31. |
From the following Balance Sheet of Yogeta Ltd., prepare cash flow statement: Additional Information: Net Profit for the year after charging Rs 50,000 as Depreciation was Rs 1,50,000. Dividend paid on Share was Rs 50,000, Tax Provision created during the year amounted to Rs 60,000. |
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Answer» Cash from Operating Activities 1,20,000 Cash from Investing Activities (3,50,000) Cash from Financing Activities 80,000 |
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| 32. |
From the following Balance Sheet of Yogeta Ltd., prepare cash flow statement: Additional Information: Net Profit for the year after charging Rs 50,000 as Depreciation was Rs 1,50,000. Dividend paid on Share was Rs 50,000, Tax Provision created during the year amounted to Rs 60,000. |
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Answer» Cash from Operating Activities 1,20,000 Cash from Investing Activities (3,50,000) Cash from Financing Activities 80,000 |
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| 33. |
From the following particulars of Bharat Gas Limited, calculate Cash Flows from Investing Activities. Also show the workings clearly preparing the ledger accounts (a) Patents were written-off to the extent of Rs 40,000 and some Patents were sold at a profit of Rs 20,000. (b) A Machine costing Rs 1,40,000 (Depreciation provided thereon Rs 60,000) was sold for Rs 50,000. Depreciation charged during the year was Rs 1,40,000. (c) On March 31, 2016, 10% Investments were purchased for Rs 1,80,000 and some Investments were sold at a profit of Rs 20,000. Interest on Investment was received on March 31, 2017. (d) Amartax Ltd., paid Dividend @ 10% on its shares. (e) A plot of Land had been purchased for investment purposes and let out for commercial use and rent received Rs 30,000. |
| Answer» Correct Answer - Rs 5,24,000 | |
| 34. |
From the following particulars of Bharat Gas Limited, calculate Cash Flows from Investing Activities. Also show the workings clearly preparing the ledger accounts (a) Patents were written-off to the extent of Rs 40,000 and some Patents were sold at a profit of Rs 20,000. (b) A Machine costing Rs 1,40,000 (Depreciation provided thereon Rs 60,000) was sold for Rs 50,000. Depreciation charged during the year was Rs 1,40,000. (c) On March 31, 2016, 10% Investments were purchased for Rs 1,80,000 and some Investments were sold at a profit of Rs 20,000. Interest on Investment was received on March 31, 2017. (d) Amartax Ltd., paid Dividend @ 10% on its shares. (e) A plot of Land had been purchased for investment purposes and let out for commercial use and rent received Rs 30,000. |
| Answer» Correct Answer - Rs 5,24,000 | |
| 35. |
A Ltd. Engaged in the business of retailing of two wheelers, invested Rs 50,00,000 in the shares of a manufacturing company. Dividend received on this investment will be ,A. Cash Flow from Operating ActivitiesB. Cash Flow from Investing ActivitiesC. Cash Flow from Financing ActivitiesD. Cash Equivalent |
| Answer» Correct Answer - B | |
| 36. |
From the following Balance Sheet of Computer India Ltd., prepare cash flow statement. Additional Information: Interest paid on Debenture Rs 600 |
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Answer» Net Cash from Operating Activities Rs 2,100 Net Cash from Investing Activities Rs 1,000 Net Cash from Financing Activities Rs 4,900 |
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| 37. |
An Example of cash flow from financing activity is :A. Payment of dividendB. Receipt iof dividend on investmentC. Cash received from customerD. Purchase of fixed asset |
| Answer» Correct Answer - A | |
| 38. |
The statement of cash flows clarifies cash flows according to …........... .A. Operating and non-operating flowsB. Investing and non-operating flowsC. Inflows and outflowsD. Operating, investing and financing activities |
| Answer» Correct Answer - D | |
| 39. |
Which of the following is an example of cash flow from Operating Activities?A. Issue of SharesB. Purchase of MachineryC. Purchas·e of InvestmentD. Purchase of Inventory for Cash |
| Answer» Correct Answer - D | |
| 40. |
An example of cash flow from operating activity is :A. purchase of own debentureB. Sale of fixed assetsC. Interest paid on term-deposits by a bankD. Issue of equity share capital |
| Answer» Correct Answer - C | |
| 41. |
An example of Cash Flow from Operating Activity is:A. Cash receipts from sale of goods and servicesB. Sale of long-term investmentsC. Interest ReceivedD. Issue of Debentures |
| Answer» Correct Answer - A | |
| 42. |
From the following extract of a company, calculate Cash Flow from the Investing Activities: |
| Answer» Correct Answer - Cash Used in Investing Activities = ₹ 2,06,000 | |
| 43. |
The following is the Profit and Loss Account of Yamuna Limited: Additional information: (i) Trade receivables decrease by Rs 30,000 during the year. (ii) Prepaid expenses increase by Rs 5,000 during the year. (iii) Trade payables increase by Rs 15,000 during the year. (iv) Outstanding expenses payable increased by Rs 3,000 during the year. (v) Other expenses included depreciation of Rs 25,000. Compute net cash from operations for the year ended March 31, 2017 by the indirect method. |
| Answer» Cash from operations Rs 2,18,000 | |
| 44. |
The following is the Profit and Loss Account of Yamuna Limited: Additional information: (i) Trade receivables decrease by Rs 30,000 during the year. (ii) Prepaid expenses increase by Rs 5,000 during the year. (iii) Trade payables increase by Rs 15,000 during the year. (iv) Outstanding expenses payable increased by Rs 3,000 during the year. (v) Other expenses included depreciation of Rs 25,000. Compute net cash from operations for the year ended March 31, 2017 by the indirect method. |
| Answer» Cash from operations Rs 2,18,000 | |
| 45. |
Identify out of the following transactions that are classified or shown as Investing Activity (i) Cash proceeds from sale of fixed asset. (ii) Cash paid for purchase of Stock-in-Trade. (ii) Repayment of loan taken. (iv) Debentures purchased. (v) Loan advanced (vi) Purchase of Patents. |
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Answer» Transactions that are classified as Investing Activity are (i) Cash proceeds from sale of fixed asset. (iv) Debentures purchased. (v) Loan advanced (vi) Purchase of Patents |
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| 46. |
An example of Cash Flows from Investing Activity is :A. Cash Revenue from OperationsB. Commission ReceivedC. Payment of cash for purchase of fixed assetsD. Dividend paid |
| Answer» Correct Answer - C | |
| 47. |
An example of cash flow from investing activity is :A. Issue of debentureB. Repayment of long-term loanC. Purchase of raw materials for cashD. Sale of investment by non-financial enterprise. |
| Answer» Correct Answer - D | |
| 48. |
Given a transaction, a part of which as an Investing Activity and part as Financing Activity. |
| Answer» Payment of instalments under Hire-Purchase System .The instalment has two components, i.e, principal and interest. Principal is shown as an Investing Activity and interest as a Financing Activity. | |
| 49. |
Interst paid by other than financial enterprise is shown in Cash Flow Statemenet under:A.Operating activitiesB. Investing activities.C. Financing activities |
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Answer» Correct Answer - C Financing activities |
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| 50. |
what is Cash Flow Statement? |
| Answer» A cash flow statement is a financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources. It also includes all cash outflows that pay for business activities and investments during a given period. | |