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Cash Flow Statement Test - 7

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Cash Flow Statement Test - 7
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Weekly Quiz Competition
  • Question 1
    1 / -0

    Mention the net amount of source of cash when a fixed asset (having book value of Rs. 15,000) is sold at a loss of Rs. 5,000.

    Solution

    Source of cash is Rs.10,000 only i.e. Book value of asset is 15,000 and sold at a loss of Rs.5,000. Sale price = Rs. 15,000 – Rs. 5,000 = Rs. 10,000.

  • Question 2
    1 / -0

    Dividend Received is considered as operating activity when______.

    Solution

    Dividend received by a finance company is considered as an operating activity as the company operates in financial items.

  • Question 3
    1 / -0

    Dividend paid by a finance company comes under_______.

    Solution

    Dividend paid by a finance company comes under Operating activity. As Dividend is a operating activity for a finance company.

  • Question 4
    1 / -0

    Interest received will be considered as financing activity when________.

    Solution

    When a company receives interest on calls in arrear, it is considered as financing activity. As calls in arrear is the part of share capital.

  • Question 5
    1 / -0

    Which of the following is not considered with operating activities:

    Solution

    Issue of Equity shares is not concerned with operating activities. It is part of financing activities.

  • Question 6
    1 / -0

    Interest on long term borrowings is an ____ relating to financial activities and shown as ______ of cash.

    Solution

    Interest paid on long term borrowings is outflow of cash. It is shown as deduction in financing activities while preparing cash flow statement as long term borrowings is a financial item.

  • Question 7
    1 / -0

    Which of the following is shown as addition in financing activities?

    Solution

    Increase in bank overdraft is shown as an addition in financing activities while preparing cash flow statement. As its increase in cash.

  • Question 8
    1 / -0

    What will be the effect of Decrease in Trade receivables on cash Inflow?

    Solution

    Decrease in Current assets (except cash and cash equivalents) will be added to the operating activities. For example: decrease in trade receivables (Current Assets) and decrease in inventories etc.

  • Question 9
    1 / -0

    Which of the following items will be added in operating activities?
    (a) Decrease in stock
    (b) Increase in creditors
    (c) Increase in debtors
    (d) Increase in outstanding expenses
    Options are

    Solution

    Following items will be added in operating activities:
    •Decrease in stock
    •Increase in creditors
    •Increase in outstanding expenses.

  • Question 10
    1 / -0

    ‘Vinod Ltd.’ is carrying on a paper manufacturing business. In the current year, it purchased machinery for Rs.30,00,000; it paid salaries of Rs. 60,000 to its employees; it required funds for expansion and therefore, issued shares of Rs. 20,00,000. It earned a profit of Rs. 9,00,000 for the current year. Find out cash flows from operating activities.

    Solution

    Cash flow from operating activities is Rs.9,00,000 after all adjustments (salary).

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