Class 12 Accountancy Chapter 6 - Cash flow statement MCQs

Class 12 Accountancy Chapter 6 – Cash flow statement MCQ Question Answers for CUET 2024

1. _______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.Dividends

c.Taxes

d.Extraordinary Items

2. 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.Deducted

b.None of the Above

c.Added Up

d.Ignored

3. 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

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

a.Interest received on short-term investments

b.Sale of marketable securities

c.Issue of shares for cash

d.Trading commission received by a manufacturing company

5. 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 124000

b.Rs 103000

c.Rs 100000

d.Rs 118000

6. Which Statement is Incorrect Regarding Cash Flow Statement?

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

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

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

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

7. ______ 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.Operating Activities

b.Investing activities

c.Financing Activities

d.Cash & Cash Equivalents

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

a.Sale of Plant and Machinery

b.Redemption of Preference Shares

c.Cash Deposited in Bank Account

d.Issue of Equity Shares

9. Which is incorrect Cash Flow Under Financing Activities

a.Cash purchase of Machinery and Plant

b.Cash repayments of amounts borrowed

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

d.Dividends paid on equity and preference capital

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

a.Direct Method

b.Indirect Method

c.Residual Method

d.Non cash Method

11. Which of these Belongs to Operating activity?

a.Receipt from royalties & Purchase of inventory

b.Procurement of loans

c.Proceeds from issue of equity shares

d.Redemption of preference

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

a.Deceased Cash Inflow

b.Deceased Cash Outflow

c.Increased Cash Inflow

d.Increased Cash Outflow

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

a.cash in hand and demand deposits with banks,

b.None of the Above

c.short-term highly liquid investments

d.Both a and b

14. 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 Operating Activities

b.Cash flow from Financing Activities

c.Cash & cash Equivalents

d.Cash flow from Investing Activities

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

a.Cash flow from Investing Activities

b.Cash flow from Operating Activities

c.Cash & cash Equivalent

d.Cash flow from Financing Activities

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

a.Cash flow from Investing Activities in Current Year

b.None of the Above

c.Cash flow from Operating Activities in Current Year

d.Cash flow from Financing Activities in Previous Year

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

a.Cash Flow Statement

b.Both A and B

c.Fund Flow Statement

d.None of the Above

18. Cash from Operating activities will decrease due to

a.Decrease in Current Liabilities

b.Neither of the two

c.Both A and B above

d.Increase in Current Assets

19. 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.Balance Sheet Asset

b.Current Liabilities

c.Reserves and Surplus

d.Contingent Liability

20. 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.60000

b.10000

c.40000

d.50000