Accountancy Chapter 6 – Cash flow statement MCQ Question and Answers – MCQs for Practice

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

2. 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

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

4. 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. _______

5. Cash from Operating activities will decrease due to

6. Which Statement is Incorrect Regarding Cash Flow Statement?

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

8. 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?

9. 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__________

10. Which is incorrect Cash Flow Under Financing Activities

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

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

13. Which of these Belongs to Operating activity?

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

15. _______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

16. 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

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

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

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

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