Cash Flow Statement – Corporate and Management Accounting MCQ


Cash Flow Statement – Corporate and Management Accounting MCQ

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Investment at the end of the year 20172018 ₹ 85,000, Investment at the end of the year 2018-2019 ₹ 70,000. During the year the company had sold 40% of its original investment at a profit of 50%. What will be the amount of cash inflow and cash outflow from the investment:

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June 2019: The following information of a non-financial enterprise is given:Purchase of fixed assets ₹ 40,000;Proceeds from the sale of equipment ₹ 35,000;Interest received ₹ 3,000;Interest paid ₹ 6,000,Dividend received ₹ 4,000 andDividend paid ₹ 15,000.Amount of cash from investing activities will be –

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Dec. 2018: Investments at the beginning and at the end of the year 2017-18 were ₹ 255 Lakh and ₹ 210 Lakh respectively. During the year 40 percent of original investments were sold at a profit of ₹ 63 Lakh. Amount of cash inflow and outflow respectively from Investments will be:

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Dec. 2018: In the case of financial enterprises, cash flow arising from interest and dividends should be classified as cash flow from:

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Which one of the following is false?

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In the cash flow statement, proceeds from sales of an asset will be considered as:

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June 2018: When the installment paid in respect of a fixed asset acquired on a deferred payment basis includes both interest and loan, the interest element is classified under activities and the loan element is classified under

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June 2018: The following item would be classified as operating activities in the statement of cash flows:

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Dec. 2017: Both cash flow statement and fund flow statement are:

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Dec. 2017: Some of the account balances of KK Ltd. are as follows in its balance sheet:

  2016(₹) 2017(₹)
Share Capital 2,50,000 4,50,000
10% Debenture 2,00,000 1,50,000
Share Premium 25,000 50,000If the interest paid on debentures was 1 20,000, the net cash flows from financing activities were:

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Dec. 2017: In the case of financial enterprises, cash flows arising from____are classified as cash flows from operating activities.

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June 2017: Arrange the following categories of cash inflows and cash outflows in the correct order:(1) Cash from investing activities(2) Cash from financing activities(3) Cash from operating activities

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: By ‘Cash Equivalents’ we mean:

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2017: In cash flow, income tax paid is treated as:

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Dec. 2016: Preference share capital of ₹ 5,00,000 was redeemed at a premium of 10%, partly out of proceeds of the issue of 20,000 equity shares of ₹ 10 each issued at 10% premium and partly out of profits otherwise available for dividends. Choose the correct effect on different activities of cash flow statement from the options given below:

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Consider the following statements:(1) Depreciation reduces tax liability; hence it is a source of funds.(2) Decrease in current liabilities during the year results in an increase in working capital.(3) The term cash equivalents include short-term marketable investments.(4) Conversion of debentures into equity shares appears in the fund’s flow statement.(5) Only non-cash expenses are added to net profit to find out funds from operation.

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: A cash flow statement is based upon while fund flow statement recognizes

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Dec. 2016: Income from investments is a cash flow from

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June 2016: Which statement contains opening as well as closing balances of cash and cash equivalents and prepared on an accrual basis

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June 2016: The purchase of machinery by issuing long-term notes payable should be reported as a

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June 2016: Pride Ltd. has profit after tax ₹ 90,000, depreciation ₹ 17,000, and decrease of debtors ₹ 20,000. The cash generated from operating activities will be:

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Statement-I:According to AS-3, the provision for taxation should always be treated as a non-operating charge on profits.
Statement-II:A dividend on shares is an appropriation of profits and not a trading charge.Select the correct answer from the following

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Dec. 2015: Arrange the following categories of cash inflows and cash outflows in the correct order of cash flow statements:(1) Cash flows from investing activities(2) Cash flows from financing activities(3) Cash flows from operating activities.Select the correct answer from the options given below

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Assertion (A):A cash flow statement enhances the comparability of the report.
Reason (R):A cash flow statement eliminates the effect of using different treatments for the same transactions.Select the correct answer from the following

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Statement-I:In funds flow analysis, current assets and current liabilities are shown separately in a statement of changes in working capital.
Statement-II:In cash flow analysis, increases and decreases of all current accounts are adjusted in the calculation of cash flow from operating activities.Select the correct answer from the following

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June 2015: In an organization, provision for taxation as of 31st December 2013 was ₹ 16,000, and on 31st December 2014 ₹ 18,000. Provision for taxation of ₹ 19,000 was made during the year 2014. The tax paid during the year is –

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June 2015: Net profit before working capital changes of Super Ltd. is ₹ 4,35,000. Changes in working capital during the year are as follows:

Decrease in stock 2,58,000
Decrease in bills payable 8,400
Increase in bills receivable 38,800
Increase in prepaid expenses 2,500
Increase in outstanding expenses 7,800Cash generated from operation for Super Ltd. will be:

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June 2015: Cash payments to and on behalf of employees is an example of cash flow from –

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June 2015: As per Accounting Standard-3, cash equivalents include –

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June 2015: In the case of a financial enterprise, interest received on debentures held as an investment is:

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June 2015: The following information pertains to Expert Ltd.:










1,75,000Net profit before working capital changes is ₹ 5,56,000. The cash flow from operating activities will be


Outstanding expenses

Provision for tax



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Dec 2014: From the following data, find the value of building sold during the year:

Particulars 31.32013 31.3.2014
Land & building 2,00,000 1,70,000
Capital reserve Nil 20,000A piece of land has been sold during the year and the profit on sale has been credited to capital reserve. Depreciation charged on the building during the year is ₹ 5,000; no additions have been made under this head during the year.

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Dec 2014: In the cash flow statement, the dividend paid in the case of a financing company is classified as

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Dec 2014: In the cash flow statement, interest received by the company is classified as

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