CBSE Class 12 Accountancy Cash Flow Statement MCQs Set D

Question. Principal revenue generating activities of an enterprise are called as
(a) Operating activities
(b) Financing activities
(c) Investing activities
(d) All of the options

Answer : A

Question. A decrease in the current asset account Prepaid Insurance.
(a) Operating Activity
(b) Investing Activity
(c) Financing Activity
(d) Supplemental Activity

Answer : A

Question. Which of the following is an example of non cash Exp
(a) Depreciation
(b) Wages and salaries
(c) Telephone Exp
(d) All of the options

Answer : A

Question. In indirect method, Which is used to calculate the amount of net cash flow from operating activities
(a) Net loss figure from Profit & Loss
(b) Net Profit figure from Profit & Loss
(c) All of the options
(d) Net income figure from the income statement

Answer : D

Question. Which activities are the same for Computation of Direct and indirect method
(a) Cash Flow from Financing Activities and Cash flow from Investment activities
(b) Cash Flow from Operating Activities and Cash flow from Investment activities
(c) Cash Flow from Operating Activities and Cash flow from Financial activities
(d) All of the options

Answer : A

Question. The main difference in direct and indirect method is to calculate the
(a) Cash flow from operating activities
(b) Cash Flow from Financing Activities
(c) Cash Flow from Investing Activities
(d) All of the options

Answer : A

Question. A cash flow statement shows
(a) Both Inflow and Outflow
(b) Inflow cash
(c) Outflow cash
(d) Not related to cash

Answer : A

Question. For calculating cash flow from operating activities, provision for doubtful debts is __________the profit made during the year
(a) Deducted from
(b) Divided to
(c) Added to
(d) All of the options

Answer : C

Question. An increase in accrued income during the particular year is ____________for calculating the cash flow from operating activities (added to/deducted from).
(a) Added to
(b) Deducted from
(c) Divided to
(d) All of the options

Answer : D

Question. Mention the net amount of‘Source’ or ‘Use’ of cash when a fixed asset having book value of Rs. 15,000 is sold at a loss of Rs. 5,000.
(a) Use Rs.5,000
(b) Source Rs. 10,000
(c) Use 115,000
(d) Source 115,000

Answer : B

Question. Dividend received by financial enterprise is shown in Cash Flow Statement under
(a) Operating Activities.
(b) Investing Activities.
(c) Financing Activities.
(d) General Activities.

Answer : A

Question. Dividend paid by a non-financial company is shown as
(a) Operating Activity.
(b) Investing Activity.
(c) Financing Activity.
(d) Cash and Cash Equivalent.

Answer : C

Question. From the following information find out the inflow of cash
31st March, 2015 31st March, 2014
Plant and Machinery Account ` Rs6,00,000 Rs 4,50,000
Accumulated Depreciation ` Rs1,60,000 Rs 1,00,000
Additional Information: Depreciation for the year 2014‐15 is Rs 80,000. During the year Machinery was Purchased for Rs 2,50,000 and a part of asset was sold at a profit of Rs 40,000.
(a) Rs 1,20,000;
(b) Rs 1,00,000;
(c) Rs 80,000;
(d) Rs40000

Answer : A

Question. Which of the following transactions would result in neither cash inflow nor outflow of cash and cash equivalents.
(a) Issue of share capital
(b) Issue of bonus shares
(c) redemption of debentures
(d)Trade recievable realize

Answer : B

Question. Gain on sale of tangible current asset is an
(a) Operating activity
(b) Investing activity
(c) Financing activity
(d) Cash and Cash Equivalents

Answer : A

Question. Sale of Copyrights is concerned with_______
(a) Investing Activities
(b) Operating Activities
(c) Both Operating Activities and Financing Activities
(d) Financing Activities

Answer : A

Question. Dividend Received is concerned with_________
(a) Operating Activities
(b) Financing Activities
(c) Investing Activities
(d) Both Operating Activities and Financing Activities

Answer : C

Question. Which is the Method for the preparation of cash flow statement
(a) Direct Method
(b) Both Direct and Indirect
(c) Indirect Method
(d) Average Method

Answer : B

Question. Which is the cash equivalents
(a) Easily convertible into cash and risk-free.
(b) Convertible into cash within three months.
(c) Highly liquid and capable of paying debts.
(d) All of the options 

Answer : D

Question. Where will you show purchase of Goodwill in a Cash Flow Statement?
(a) Cash Flow from Operating Activities
(b) Cash Flow from Investing Activities
(c) Cash Flow from Financing Activities
(d) Cash Equivalent

Answer : B

Question. Which of the following are cash flow from investing activities
(a) Sale of fixed assets
(b) Interest received
(c) Dividend received
(d) All of the options

Answer : D

Question. Which of the following is not a cash inflow
(a) Decrease in creditors
(b) Decrease in debtors
(c) Issue of shares
(d) Sale of fixed assets

Answer : A

Question. Which of the following is an example of cash flow from Operating Activities?
(a) Issue of Shares
(b) Purchase of Machinery
(c) Purchase of Investment
(d) Purchase of Inventory for Cash

Answer : B

Question. Refund of income tax is the part of
(a) Operating activities in Cash Flow Statement
(b) Financing Activities in Cash Flow Statement
(c) Investing Activities in Cash Flow Statement
(d) All of the options

Answer : A

Question. The various activities operating, investing and financing classified as per ___related to cash flow statement
(a) AS 3 (revised)
(b) AS 4 (revised)
(c) AS 5 (revised)
(d) AS 6 (revised)

Answer : A

Question. Which of the following are cash flow from operating activities
(a) Cash Receipts from customers and Cash Paid to Supplier and Employees
(b) Cash Receipts from customers
(c) Cash Paid to Supplier and Employees
(d) None of the options

Answer : A

Question. Cash Inflows from Investing Activities are
(a) Dividend received from investments in other enterprises
(b) Cash receipt from disposal of fixed assets
(c) Interest received in cash from loans and advances
(d) All of the options

Answer : D

Question. Cash flow statement is based upon _________ basis of accounting
(a) On Cash basis
(b) On Accrual Basis
(c) Non Cash Basis
(d) All of the options

Answer : A

Question. For the calculation of cash flow from operating activities, payments and receipts shown in Profit & Loss account are converted into payments and receipts actually in cash by eliminating
(a) Non-cash revenue from the revenue earned and Non-cash expenses from expenses incurred
(b) Non-cash revenue from the revenue earned
(c) Non-cash expenses from expenses incurred
(d) None of the options

Answer : A

Question. Rent received is classified under
(a) Investing Activities
(b) Operating Activities
(c) Cash and Cash Equivalents
(d) Financing Activities

Answer : A

Question. From the following information find the cash generated from operations:
Operating Profit before working capital changes 1,00,000
Depreciation on fixed assets 15,000
Loss on sale of Furniture 5,000
Interest paid 13,000
Dividend received
Increase in debtors 8,000
Decrease in stock 7,000
Increase in creditors 4,000
(a) Rs 1,18,000
(b) Rs 1,24,000
(c) Rs 1,03,000
(d) Rs 1,00,000

Answer : C

Question. Bank Overdraft and cash credit are to be treated as:
(a) Cash Equivalents
(b) Non Current Liabilities
(c) Investing Activity
(d) Short Term Borrowings

Answer : D

Question. Pick the odd one out
(a) Long term borrowings
(b) Reserves and surplus
(c) Share capital
(d) Public deposits.

Answer : B

Question. From the following information, the outflow of cash for the purchase of machinery will be:
Written down value of machinery as on 1.4.2011 – Rs 5,00,000
Written down value of machinery as on 31.3.2012 -Rs7,00,000
Depreciation on machinery charged during the year Rs 60,000
Machinery having book value Rs 25,000 sold for Rs 20,000
(a) Rs 2,70,000
(b) Rs 2,80,000
(c) Rs 2,75,000
(d) Rs 2,85,000

Answer : D

Fill in the Blanks

Question. Patents purchased and completely amortized in the year of purchase is added under_____ ________and shown as an outflow under______.
Answer : Operating, Investing

Question. Loss on issue of debentures written off is shown by way of deduction from_________________ of the debentures.
Answer : Face value

Question. Purchase of securities by a non- finance company is.
Answer : Investing

Question. The basis of Cash Flow Statement is .
Answer : Cash Basis

Question. Debentures issued for consideration other than cash are not shown in the Cash Flow Statement because ______________is not received against the issue.
Answer : Cash