Cash Flow Statement CBSE Questions & Answers

Cash Flow Statement

This is Accountancy Class 12 Cash Flow Statement CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

A statement of cash flows would be least useful in answering which of the following questions?

A
Were cash dividend paid by the company more or less than the net cash flow from operations
B
What was the average balance in cash account during the period
Correct
C
Did operating activities result in positive or negative net cash flow
D
How cash was used by financing activities during the period

Payment of dividend is classified as

A
Investment activities
B
None
C
Financial activities
Correct
D
Operational activities

cash flow statement means

A
shows inflow and outflow of cash and cash equivalents from operating activities
B
All
Correct
C
shows inflow and outflow of cash and cash equivalents from operating, activities
D
shows inflow and outflow of cash and cash equivalents from operating activities

the various activities operating, investing and financing classified as per ___related to cash flow statement

A
AS-3(revised)
Correct
B
AS-5(revised)
C
AS-4(revised)
D
AS-6(revised)

Which of the following is not concerned with Financing Activity?

A
Loan taken from bank
B
Issue of Equity Shares
C
Increase in Securities Premium
D
Sale of investment
Correct

Short –term highly liquid investments which are readily convertible into known amount of cash and which are subject to an insignificant risk of change in the value are called

A
None
B
cash fund
C
Cash equivalent
Correct
D
cash

Cash and Cash Equivalents do not include _______

A
Cash in hand
B
Cash at bank
C
Cheques in hand
D
Inventories
Correct

Some type of transaction which are considered movement between cash and cash equivalents are given below except

A
Purchase of cash equivalent securities
B
Sale of cash equivalent securities
C
Cash withdrawn from bank.
D
Cash credit
Correct

Which of the following transaction is untrue regarding the limitations of cash flow statement

A
To ascertain the net changes in cash and cash equivalents
B
To help in short-term financial planning.
C
To ascertain the liquidity of enterprises
D
It is not used for judging the profitability of enterprises
Correct

Which activity is the main revenue generating activities of the enterprises

A
Cash flow from operating activities
Correct
B
Cash flow from investment activities
C
Cash flow from management activities
D
Cash flow from financing activities

In a statement of cash flows (indirect method) a decrease in inventory should be reported as

A
An addition
Correct
B
A deduction
C
In investing activity
D
Not reported

When provision for depreciation account is separately maintained. In this method two accounts namely ___ and _____ account is prepared

A
Fixed assets and provision for recitation account
Correct
B
Fixed assets and Dividend account
C
Investment and provision for recitation account
D
Fixed assets and Investment account

Operating activities analyzed the which account

A
Long-term liabilities and stockholders’ equity
B
None of these
C
Long term assets
D
Current asset sand liabilities
Correct

Which activity means the business activities being carried out by the enterprises form which it earns profit

A
Principal revenue producing activities
Correct
B
Financial activities
C
Investment activities
D
Operational activities

Purchase and Sales of Shares comes under operating activities of _____________

A
Public companies
B
Manufacturing units
C
Private companies
D
Financial institutional
Correct