Cash Flow Statement Test

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Cash Flow Statement Test - 20

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Weekly Quiz Competition

Question 1
1 / -0

Some companies give cash flow statements in their annual reports as prescribed by ____________________.

A
Part IV of Schedule VI to the Companies Act 1956

B
The listing agreement with the stock exchanges

C
The SEBI regulations

D
The Accounting Standard 3 on cash flow statements
Question 2
1 / -0

Revenue from sale of goods manufactured is shown in the statement of profits and loss as ____________________.

A
Revenue from operations

B
Other Income

C
Any of the above

D
None of the above

Solution

Revenue from sale of goods manufactured is shown in the statement of profit and loss as revenue from operations because goods manufactured is the main activity and hence, sale of the goods manufactured is a part of main business activity.
Sale of goods manufactured is an operating activity of the business and any revenue that arises from the same will be shown in revenue from operations.
Question 3
1 / -0

When funds from operations are Rs. 65,000 and depreciation on plant is Rs. 7,500, the amount of net profit

A
Is Rs. 65,000

B
Is Rs. 72.500

C
Is Rs. 57,500

D
Cannot be computed

Solution

Net Profit = Funds from Operations - Depreciation
= 65000 - 7500
= 57,500

Question 4

1 / -0

The following is the position of current assets and current liabilities of XY Ltd.
2014 2015
Debtors 20,000 25,000
Creditors 15,000 17,000
Bills Payable 18,000 20,000
Stock 16,000 26,000
Loss incurred during year was Rs.10,000. What is the amount of cash from operations?

Rs. 37,000 (-)

Rs. 29,000 (-)

Rs. 12,000 (+)

Rs. 21,000 (-)

Solution

Particulars

Loss incurred during the year

Amount

(10,000)

Add:- Increase in Current liabilities, decrease

current assets

1) Increase in Creditors (17,000 - 15,000)

2)Increase in Bills payable (20,000 - 18,000)

2,000

Less:- Increase in Current Assets, Decrease in Current

liabilities

1) Increase in Debtors (25,000 - 20,000)

2) Increase in stock (26,000 - 16,000)

(5,000)

(10,000)

Cash from operations

(21,000)

Question 5
1 / -0
Which of the monetary policy tool(s) is /are NOT with government securities?
1. Cash Reserve Ratio
2. Repo Rate
3. Statutory Liquidity Ratio
4. Marginal Standing Facility
Select the correct answer using the
A
1 and 2 only

B
1 only

C
1 and 4 only

D
4 only
Question 6
1 / -0

Sum of discounted cash flows is best defined as _____________.

A
technical equity

B
defined future value

C
project net present value

D
equity net present value
Question 7
1 / -0

Free cash flow is Rs 17000 and net investment in operating capital is Rs 10000 then net operating profit after taxes would be __________.

A
Rs 7, 000.00

B
Rs 27, 000.00

C
- Rs 27, 000.00

D
- Rs 7, 000.00
Question 8
1 / -0

Which Accounting Standard is applicable for preparation of Cash Flow Statement?

A
Accounting Standard - 6

B
Accounting Standard - 3

C
Accounting Standard - 2

D
Accounting Standard - 13
Question 9
1 / -0

Cash outflows are costs of project and are represented by ____________.

A
negative numbers

B
positive numbers

C
hurdle number

D
relative number
Question 10
1 / -0

Which of the following transactions will result into flow of cash ?

A
Cash withdrawn from bank $$Rs 71,000$$.

B
Issue of $$9\%$$ debentures of $$Rs 1,00,000$$ to the vendors of machinery.

C
Received from debtors $$Rs 74,000$$

D
Redeemed $$10\%$$ debentures by converting the same into equity shares.

Solution

Amount received from debtors $$Rs 74,000$$ will be received in cash. This is the only transaction that results in flow (inflow) of cash into the business.
Why other options are incorrect?
1. Deposit of cash into bank and withdrawal of cash from bank are merely the cash management activities of the business. They do not involve any cash flow.
2. Conversion of debentures into equity shares is a mere change in capital structure of the company. It does not result in cash flow.
Hence, the correct answer is option (iii).

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Cash Flow Statement Test - 20

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Cash Flow Statement Test - 20

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SHARING IS CARING

Question 1

Part IV of Schedule VI to the Companies Act 1956

The listing agreement with the stock exchanges

The SEBI regulations

The Accounting Standard 3 on cash flow statements

Question 2

Revenue from operations

Other Income

Any of the above

None of the above

Solution

Question 3

Is Rs. 65,000

Is Rs. 72.500

Is Rs. 57,500

Cannot be computed

Solution

Question 4

Rs. 37,000 (-)

Rs. 29,000 (-)

Rs. 12,000 (+)

Rs. 21,000 (-)

Solution

Question 5

1 and 2 only

1 only

1 and 4 only

4 only

Question 6

technical equity

defined future value

project net present value

equity net present value

Question 7

Rs 7, 000.00

Rs 27, 000.00

- Rs 27, 000.00

- Rs 7, 000.00

Question 8

Accounting Standard - 6

Accounting Standard - 3

Accounting Standard - 2

Accounting Standard - 13

Question 9

negative numbers

positive numbers

hurdle number

relative number

Question 10

Cash withdrawn from bank $$Rs 71,000$$.

Issue of $$9\%$$ debentures of $$Rs 1,00,000$$ to the vendors of machinery.

Received from debtors $$Rs 74,000$$

Redeemed $$10\%$$ debentures by converting the same into equity shares.

Solution

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