Cash Flow Statement Test - 8

Dividend paid by any type of company will come under financing activities.

Cash deposit with the bank with a maturity date after two months belongs to Cash and Cash Equivalents. As it is a Current Activity.

Loss on sale of furniture will be added to the net profit in operating activities while preparing cash flow statement.

Purchase of plant and machinery is part of investing activities where the amount of the same will be deducted while preparing cash flow statement. As cash will be out flow.

Decrease in the value of Patents (Intangible assets) is known as amortization. It is added to the operating activities while preparing cash flow statement.

Purchase of shares of other company means investment in other company. It is considered as Investing Activities.

Long term investment is part of investing activities. Short term investment is part of cash and cash equivalents. As these are Non current Assets and Current Assets respectively.

There will be no flow of cash because short term investment and cash both are part of cash and cash equivalents. Decrease in investment and increase in cash will keep Cash and Cash Equivalents are same.

There will be no flow of cash because old furniture is written off as depreciation and not sold.

Increase in the value of Trademarks will be considered as Investing activities (purchase of assets) and decrease considered as operating activities (written off intangible assets).