Cash Flow Statement Test - 7

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

Provision for doubtful debts will appear under Short- term Provisions in the heading of Current Liabilities in Company's Balance Sheet.

Following are the source of finance except fixed assets:
•Bank Loan
•Bank Overdraft
•Debentures

As fixed assets is a investing activity.

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.

When a new partner pays his premium for goodwill amount privately to the sacrificing partners, No entry will be passed in the books.

Purchase of shares or debentures are concerned with investing activities as it is a investment in other company's share and/or debentures.

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

Repayment of Long term loans is a financing activities as it reduce company's Non current liabilities.

According to Company's Balance Sheet Format Computer Software is a Non Current Liabilities as fixed intangible Assets.

Refund of income tax is the part of operating activities as Income tax is a operating activities and Income tax refund shows in cash flow from operating activities while preparing cash flow statement.

Proposed Dividend is classified under short term provisions as it is shown in the Head of Current liabilities.

According to Balance Sheet format given in Indian Companies Act 2013 Deferred Tax Liabilities are shown under the heading of Non - Current Liabilities.

Rent Received is classified under investing Activities in preparation of Cash Flow Statement.

Repayment of Redemption of preference Shares is concerned with financing activities. Cash is going out in the form of Redemption of preference Shares.

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./p>

Public deposit is a source of finance. Interest paid on public deposits (financial Expenses) will be added in operating activities and deducted in financing activities.

Loose Tools is the part of Inventories as it is not for sale purpose.

Sale of Copyrights is concerned with investing activities as Copyrights is a intangible assets of a company.

Buy back of equity share is a financing activities as its effect on company's financial position (share holder's fund).

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).

Income tax is concerned with only operating activities. Tax paid is deducted at the end while calculating Cash flow from operating activities in Cash Flow statement.

Divedend received is added to investing activities while calculating Cash flow from investing activities in Cash Flow statement. As Dividend Recieved on investment in other companies.

Purchase of any fixed asset is considered as investing activities. As office equipment is a fixed asset.

Sale of machinery is concerned with Investing Activities as cash inflow from sale of company's Non Current Assets.

Cash Receipts from sale of goods by a trading company come under operating activities. As it is an operating transaction.