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51.

Why is Cash Flow Statement prepared? OR What is the objective of preparing Cash Flow Statement? OR State the primaty objective of preparing Cash Flow Statement.

Answer» The primary purpose of the statement of cash flows is to provide information about cash receipts, cash payments, and the net change in cash resulting from the operating, investing, and financing activities of a company during the period.
Discussion
52.

if 6% pref. share capital Rs 2,00,000 were redeemed at a premium of 5%, while preparing Cash Flow Statement its effect on cahs flow will be:A. Cash used from financing activities Rs2,12,000B. Cash received from financing activities Rs 2,12,000C. Cash used (Payment) from financial activities Rs 2,10,000D. Cash used (Payment) from financial activeities Rs 2,00,000

Answer» Correct Answer - C
Discussion
53.

An example of Cash Flows from Financing Activity is :A. Credit Revenue from OperationsB. Cash receipts from issue of sharesC. Sale of InvestmentsD. Interest Received

Answer» Correct Answer - B
Discussion
54.

If a machine whose original cost is Rs 40,000 having accumulated depreciation Rs 12,000 were sold for Rs 34,000 then while preparing Cash Flow Statement its effect on cash flow will be :A. Cash flow from financing activities Rs 34,000B. Cash flow from financing activities Rs 6,000C. Cash flow from financing activities Rs 34,000D. Cash flow from financing activities Rs 6,0000

Answer» Correct Answer - C
Discussion
55.

Cash Flow Statement is based upon:A. accrual basis of accounting.B. cash basis of accounting.C. accounting equation.

Answer» Correct Answer - B
cash basis of accounting.
Discussion
56.

Interest received by other than financial enterprise is shown in Cash Flow Statement underA.Operating activitiesB. Investing activities.C. Financing activities

Answer» Correct Answer - B
Investing activities.
Discussion
57.

Dividend received by other than financial enterprise is shown in Cash Flow Statement under:A.Operating activitiesB. Investing activities.C. Financing activities

Answer» Correct Answer - B
Investing activities.
Discussion
58.

Dividend received by financial enterprise is shown in Cash Flow Statement under:A.Operating activitiesB. Investing activities.C. Financing activities

Answer» Correct Answer - A
Operating activities
Discussion
59.

State whether cash deposited in bank will be classified under which kind of activity?A. Cash Flow from Operating ActivitiesB. Cash Flow from Investing ActivitiesC. Cash flow from Financing ActvitiesD. No Cash Flow

Answer» Correct Answer - D
Discussion
60.

Payment of Income Tax is classified as:A.Operating activitiesB. Investing activities.C. Financing activities

Answer» Correct Answer - A
Operating activities
Discussion
61.

Givn the meaning of Cash Flow.

Answer» The amount of cash or cash-equivalent which the company receives or gives out by the way of payment(s) to creditors is known as cash flow.
Discussion
62.

An example of an activity which is classified as financing activity in case of all enterprise is:A. Payment of salariesB. Payment of Divided on SharesC. Purchase of GoodwillD. Payment Interset on Borrowings.

Answer» Correct Answer - B
Payment of Divided on Shares
Discussion
63.

Identify out of the following transactions that are shown as Financing Activity: (i) Repayment of Loan taken. (ii) Proceeds from Issue of Shares. (iii) Debentures subscribed by the company (iv) Redemption of Preference Shares ltbgt (v) Interest paid. (vi) Dividend paid (vii) Increase in Bank Overdraft or Cash Credit (viii) Issue of bonus shares.

Answer» Transactions that are shown as Financing Activity are
(i) Repayment of Loan taken
(ii) Proceeds from Issue of Shares.
(iv) Redemption of Preference Shares
(v) Interest paid.
(vi) Dividend paid.
(vii) Increase in Bank Overdraft or Cash Credit
Discussion
64.

Cash flow statement is prepared for financial planning of .............A. Long rangeB. Medium rangeC. Short rangeD. Very Long range

Answer» Correct Answer - C
Discussion
65.

Which of the following is source of cash?A. Cash deposited into BankB. Cash withdrawn from BankC. Sale of Goods costaing Rs 10,000 for Rs 8,000D. Sale of marketable securities for cash

Answer» Correct Answer - C
Discussion
66.

Which of the following is not application of cash?A. Issue of sharesB. Purchase of MachineryC. Sale of AssetD. Dividend received

Answer» Correct Answer - B
Discussion
67.

Which of the following is not application of cashA. Increase in DebtorsB. Increase in InventoryC. Increase in Bills PayableD. Increase in Prepaid Expenses

Answer» Correct Answer - C
Discussion
68.

While calculating operating profit which will be added to net profit:A. Preliminary Expenses Written offB. DepreciationC. Loss on Sale of AssetD. All of the above

Answer» Correct Answer - D
Discussion
69.

Cash from operating activities consists of :A. Operating ProfitB. Decrease/Increasees in Current AssetsC. Decrease/Increase in Current AssetsD. All of the above

Answer» Correct Answer - D
Discussion
70.

Which of the following is incorrect about the statement of cash flows?A. It provides information about the cash receipt and cash payments of an enterprise.B. It reconciles ending cash balance with the balance as per bank statement.C. It provides information about the operating, investing and financing activities.D. It explains the deviation of cash from Earnings.

Answer» Correct Answer - B
Discussion
71.

While calculating profit which will be added to net profit:A. profit on Sale of AssetB. Increases in General ReservesC. Interest receivedD. Refund of Tax

Answer» Correct Answer - B
Discussion
72.

Cash from Operating activities will decrease due to :A. Invtrsdr in Current AssetsB. Decrease in Current LiabilitiesC. Neither of the twoD. Both A and B above

Answer» Correct Answer - D
Discussion
73.

While calculating cash flow from operating activities which will be added:A. Increase in InventoryB. Increase in CreditorsC. Devrease in Billls PayableD. Increase in Trade Receivables

Answer» Correct Answer - B
Discussion
74.

While calculating cash flow from operating activities which will be deducted:A. Decrease in Prepaid ExpensesB. Increase in PayablesC. Increase in Trade ReceivablesD. Decrease in Trade Receivables

Answer» Correct Answer - C
Discussion