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Cash Flow Statement Questions And Answers Pdf

cash flow statement questions and answers pdf

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These test papers with solution are prepared by our team of expert teachers who are teaching grade in CBSE schools for years. There are around set of solved Accountancy Extra questions from each and every chapter.

We speak to SMEs, business owners, accounting and finance professionals on a daily basis, and have gathered many insights about cash flow and financing. In our conversations, we have realised that there are often many misconceptions around the topic of cash flow — a lack of understanding can easily lead to cash flow management issues. The topic of cash flow is indeed not an easy concept to grasp, so we've tried breaking it down. This may sound basic, but it is one of the most common questions around business finance, so we had to keep it on the list.

Cash Flow Statement: Problems and Solutions | Accounting

Question 1. Payment of cash to acquire Debenture by a. Financing activity an Investing Company II. Purchase of Goodwill b. Investing Activity III. Dividend paid by manufacturing company c. Operating activity. Question 2. Which of the following is the source of cash? Question 3. While calculating cash flows from operating profit, which of the following is not considered in the net profit? Question 4. Which of the following statement is incorrect about cash flow statement?

Question 5. Which of the following will come under operating activity? Question 6. Which of the following will not come under anywhere in cash flow statement? Question 7. Question 8. Where will you show sale and purchase of shares and securities if it relates to revenue generating activity? Question 9. Which of the following transaction is always shown under financing activities? Question Investments made by a financial enterprise with the purpose to resell after the expiry of three months will come under which of the following activity?

Investments made with the purpose to resell after the expiry of three months will come under which of the following activity? Kaveri Ltd. Which of the following transactions will not result into flow of cash? Cash Flow Statement helps in reconciling closing bank balance with the balance as per bank statement. Receipt of dividend on investment is always inflow of cash under investing activities for all types of companies. Tax on capital gains due to sale of non-current assets are shown under investing activities.

Increase or decrease in bank overdraft and cash credit is shown under financing activities. Rent received form immovable property held as investments is shown under operating activities. Loans and advances granted is an operating activity for a financial enterprise. Rental Income on the property held as stock is shown under operating activities for a non manufacturing enterprise.

Mevo Ltd. Compute Cash flows from Investing Activities. CBSE Delhi Answer: Note: As it is clearly mentioned that shares are purchased for investment. They have been treated as investing activities.

For Ex-short term marketable securities. The primary purpose of the statement of cash flows is to provide information about cash receipt, cash payments, and the net change in cash resulting from the operating, investing and financing activities of a company during the period.

K Ltd. Calculate the amount of Cash Flow from financing and investing activities. Also give reason in support of your answer. Answer: Receipt of dividend can be an operating activity for a financial company as it is a principal revenue generating activity. Cash flow from Investing Activities. CBSE Compt. Answer: Financing activities are the activities that result in change in capital or borrowings of the enterprise.

What is mean by investing activities for preparing Cash Flow Statement? Answer: Investing activities as per AS-3 are the acquisition and disposal of long term assets and other investments not included in cash equivalents.

State the primary objective of preparing Cash Flow Statement. Answer: The primary objective of preparing Cash Flow Statement is to provide useful information about cash inflows and outflows of an enterprise during a particular period. Answer: Cash Flow Statement is a statement showing inflows and outflows of cash and cash equivalents during a particular period.

Cashier of Y Ltd. Will this transaction result into inflow, outflow or no flow of cash? Give reason in support of your answer. Interest received and paid is considered as which type of activity by a finance company while preparing the cash flow statement.

CBSE Give any one example of cash inflows from operating activities other than cash receipts from sale of goods and rendering of services. G G Limited is engaged in manufacturing of packaged food. For the purpose of preparing their respective Cash Flow Statements, under which category of activities the purchase of shares will be classified by P P Limited and G G Limited?

State one component of cash. Delhi Give an example of an activity, which is a financing activity for every type of enterprise. Net increase in working capital other than cash and cash equivalents will increase, decrease or not change cash flow from operating activities. Give reason in support ofyour answer. Answer: Cheques and Drafts in hand are not considered while preparing cash flow statements as they are part of cash and cash equivalents only.

Normally, what should be the maturity period for a short-term investment from the date of its acquisition to be qualified as cash equivalents? Outside Delhi The Goodwill of X Ltd. Where will you show the treatment while preparing Cash Flow Statement for the year ended 31st March ? Does movement between items that constitute cash or cash equivalents result into cash flow?

Find out cash flows from operating activities. Delhi Compartment Finserve Ltd. Is carrying on a mutual fund business. Find out cash flows from investing activities. Interest received by a finance company is classified under which kind of activity while preparing a cash flow statement.

While preparing cash flow statement of Sharda Ltd. Depreciation provided on fixed asset was added to the net profit to calculate cash flow from operating activities. Was the accountant correct in doing so? Give reason. While preparing the cash flow statement of Alka Ltd. Dividend paid was shown as an operating activity by the accountant of the company. Was he correct in doing so? Asia Ltd. Mention with reason whether it is cash inflow, cash outflow or no cash flow.

Mention with reason whether it is cash inflow, cash outflow or no cash. Mention the case in which interest received other than interest on calls in arrears is treated as cash inflow from operating activities.

State with reason whether deposit of cash into bank will result into inflow, outflow or no flow cash. CBSE Delhi.

Cash Flow Statement Class 12 Accountancy Practice Questions

Statement of cash flows multiple choice questions MCQs. What is the difference between net cash flow and net income? Where does the interest paid on bank loans get reported on the statement of cash flows. Where is interest on a note payable reported on the cash flow statement? It gives us the net cash flow from operational activities. Cash flow from financing and investing activities, as you already mentioned, are the same as in the direct method..

Concepts of Cash Flow Statement - MCQs with answers

Accounting standard - 3, which was issued by the Institute of Chartered Account of India ICAI in , has made it mandatory for all listed companies to prepare the cash flow statement annually. The solutions explain the methods of preparing a cash flow statement to evaluate changes in net assets and the ability to affect the amount in time by a corporation. Calculating the equations from the DK Goel Solutions Class 12 Cash Flow Statement helps students to understand the value of future cash flows of that company.

Have you heard of this saying? Cash is king. This is a common saying in the business world. And it is quite true, because cash is the lifeblood of the business.

B Increase in Creditors B Cash Flow from Investing Activities Interest received by a finance company is classified under which kind of activity while preparing a Cash flow statement? A Cash receipts from sale of goods and services C Cash Flow from Financing Activities Cash payments for income taxes are included on the statement of cash flows as : a. D All of the Above, 6. C Cash and Cash equivalent a Receipt of cash from the issuance of bonds payable.

Multiple Choice Questions for important part of exams for Grade 12 Accountancy and if practiced properly can help you to get higher marks. While calculating operating profit which will be added to net profit:. State whether cash deposited in bank will be classified under which kind of activity?

2 Comments

  1. Trocpostgoldhomb

    06.06.2021 at 07:56
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  2. Rastwoodgala

    07.06.2021 at 17:09
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    Answer will be showing it that is closing bank and cash balance. Page 3. Illustration The following are Balance Sheet and Income Statement of Om ltd.

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