CUET 2023 Accountancy Chapter 6 - Cash flow statement MCQs

Accountancy Chapter 6 – Cash flow statement MCQ Question Answers for CUET 2023

1. Which is incorrect Cash Flow Under Financing Activities

a.Cash purchase of Machinery and Plant

b.Dividends paid on equity and preference capital

c.Interest paid on debentures and long-term loans and advances.

d.Cash repayments of amounts borrowed

2. Which of the following will come under operating activity?

a.Interest received on short-term investments

b.Trading commission received by a manufacturing company

c.Issue of shares for cash

d.Sale of marketable securities

3. Cash from Operating activities will decrease due to

a.Decrease in Current Liabilities

b.Increase in Current Assets

c.Neither of the two

d.Both A and B above

4. Capital gains tax paid on sale of fixed assets should be classified under_________.

a.Operating Activities

b.investing activities

c.Financing Activities

d.Cash & Cash Equivalents

5. While Preparing Cash Flow Statement, non-cash items and non-Operating items are not required to be adjusted Under_______

a.Indirect Method

b.Residual Method

c.Direct Method

d.Non cash Method

6. Declaration Of Dividend of Previous Year will be Classified as

a.Cash flow from Financing Activities in Previous Year

b.None of the Above

c.Cash flow from Operating Activities in Current Year

d.Cash flow from Investing Activities in Current Year

7. Which of these Belongs to Operating activity?

a.Receipt from royalties & Purchase of inventory

b.Redemption of preference

c.Proceeds from issue of equity shares

d.Procurement of loans

8. Which Statement is Incorrect Regarding Cash Flow Statement?

a.It also helps in balancing its cash inflow and cash outflow, keeping in response to changing condition

b.It also enhances the comparability of the reporting of operating performance

c.The primary objective of CFS is to provide useful information Importantly of Cash Inflows Instead of cash flows

d.A cash flow statement when used along with other financial statements provides information

9. ______shows inflow and outflow of cash and cash equivalents from various activities of a company during a specific period.

a.Fund Flow Statement

b.None of the Above

c.Both A and B

d.Cash Flow Statement

10. _______are non-recurring in nature and hence cash flows associated with extraordinary items should be classified and disclosed separately as arising from operating, investing or financing activities

a.Non-Extraordinary items

b.Taxes

c.Dividends

d.Extraordinary Items

11. From the following information Find the cash Flow. Operating Profit before working capital changes -Rs.100000, Depreciation on fixed assets- Rs.15000, Loss on sale of Furniture- Rs. 5000, Interest paid- Rs. 13000, Increase in debtors – Rs. 8000 Decrease in stock-Rs. 7000 Increase in creditors -Rs. 4000

a.Rs 103000

b.Rs 118000

c.Rs 124000

d.Rs 100000

12. As Per Cash Flow Statement, when a firm invests in fixed assets and short-term financial investments results into

a.Deceased Cash Outflow

b.Deceased Cash Inflow

c.Increased Cash Inflow

d.Increased Cash Outflow

13. A company receives a dividend of Rs.2 Lakhs on its investment in other company’s shares. In case If its a Finance Company, it will be classified under which kind of activity?

a.Cash flow from Financing Activities

b.Cash flow from Operating Activities

c.Cash & cash Equivalents

d.Cash flow from Investing Activities

14. As per AS-3, ‘Cash’ comprises of; -

a.None of the Above

b.Both a and b

c.short-term highly liquid investments

d.cash in hand and demand deposits with banks,

15. Which of the Transaction will not be regarded as cash flow?

a.Redemption of Preference Shares

b.Issue of Equity Shares

c.Cash Deposited in Bank Account

d.Sale of Plant and Machinery

16. Where Purchase of goodwill in Cash Flow Statement Will appear Under?

a.Cash flow from Operating Activities

b.Cash flow from Financing Activities

c.Cash & cash Equivalent

d.Cash flow from Investing Activities

17. As per AS-4, Contingencies and Events Occurring after the Balance Sheet Date, Proposed dividend is shown in the Notes to Accounts. It will be shown as contingent liability since it becomes a liability after it is declared (approved) by the shareholders

a.Current Liabilities

b.Contingent Liability

c.Balance Sheet Asset

d.Reserves and Surplus

18. If the net profits earned during the year is Rs. 50000 and Number of debtors in the beginning and the end of the year is Rs. 10000 and Rs. 20000 respectively, then the cash from operating activities will be equal to Rs. _______

a.10000

b.40000

c.50000

d.60000

19. ______ are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Investing activities relate to purchase and sale of long-term assets or fixed assets such as machinery, furniture, land and building, etc

a.Financing Activities

b.Investing activities

c.Operating Activities

d.Cash & Cash Equivalents

20. Against the Changes in current assets and liabilities during the period. Adjustments should be made as Increase in current assets and decrease in current liabilities are to be__________

a.None of the Above

b.Deducted

c.Ignored

d.Added Up