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Test: Cash Flow Statement - 2


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20 Questions MCQ Test Accountancy Practice Tests: CUET Preparation | Test: Cash Flow Statement - 2

Test: Cash Flow Statement - 2 for Commerce 2022 is part of Accountancy Practice Tests: CUET Preparation preparation. The Test: Cash Flow Statement - 2 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Cash Flow Statement - 2 MCQs are made for Commerce 2022 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Cash Flow Statement - 2 below.
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Test: Cash Flow Statement - 2 - Question 1

Cash Flow Statement is also known as

Test: Cash Flow Statement - 2 - Question 2

Purchase of shares or debentures are concerned with________

Detailed Solution for Test: Cash Flow Statement - 2 - Question 2

Purchase of shares or debentures are concerned with investing activities. It means a firm is investing in other firm’s shares or debentures.

Test: Cash Flow Statement - 2 - Question 3

Buy Back of equity shares is concerned with_________

Detailed Solution for Test: Cash Flow Statement - 2 - Question 3

Buy back of shares is concerned with financing activities. This is the situation where one company is buying its own shares form the open market.

Test: Cash Flow Statement - 2 - Question 4

Repayment of long term loans _________

Detailed Solution for Test: Cash Flow Statement - 2 - Question 4

Repayment of long term loans is concerned with financing activities. Cash is going out in the form of repayment of long term loans.

Test: Cash Flow Statement - 2 - Question 5

Income tax paid is concerned with__________

Detailed Solution for Test: Cash Flow Statement - 2 - Question 5

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

Test: Cash Flow Statement - 2 - Question 6

______ are highly liquid assets that can be converted into cash shortly.

Detailed Solution for Test: Cash Flow Statement - 2 - Question 6

Cash Equivalents are highly liquid assets which can be converted into cash in a very short period of time.

Test: Cash Flow Statement - 2 - Question 7

Payment of dividend is classified as

Detailed Solution for Test: Cash Flow Statement - 2 - Question 7

The correct option is C.

Financing activities are transactions or business events that affect long-term liabilities and equity. In other words, financing activities are transactions with creditors or investors used to fund either company operations or expansions.The general philosophy is that dividend payments are considered to be Financing Activities because these are payments to the investors (shareholders) who actually are co-financing the company. These dividend payments may be interpreted as "variable interests" to the investors of equity for their risk taken in the company .

Test: Cash Flow Statement - 2 - Question 8

Which of the following is not a cash inflow?

Detailed Solution for Test: Cash Flow Statement - 2 - Question 8

Following are the cash inflows except goods purchased in cash: Goods sold in cash Interest received on investment Sale of asset at loss

Test: Cash Flow Statement - 2 - Question 9

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

Detailed Solution for Test: Cash Flow Statement - 2 - Question 9

The various activities operating, investing and financing classified as per Accounting Standard – 3 (AS- 3 Revised) related to cash flow statement

Test: Cash Flow Statement - 2 - Question 10

Which of the following is not concerned with Financing Activity?

Test: Cash Flow Statement - 2 - Question 11

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 -----

Detailed Solution for Test: Cash Flow Statement - 2 - Question 11

Short term investments which can be converted into cash in a very short period of time is treated as cash equivalents.

Test: Cash Flow Statement - 2 - Question 12

Cash and Cash Equivalents do not include_____

Detailed Solution for Test: Cash Flow Statement - 2 - Question 12

Cash and Cash Equivalents do not include inventories but following items are part of cash and cash equivalents:
•Cheques in hand
•Cash in hand
•Cash at bank

Test: Cash Flow Statement - 2 - Question 13

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

Detailed Solution for Test: Cash Flow Statement - 2 - Question 13

Internal movement in cash and cash equivalents will not make any effect. Cash credit is not part of cash and cash equivalents. It is part of financing activities.

Test: Cash Flow Statement - 2 - Question 14

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

Detailed Solution for Test: Cash Flow Statement - 2 - Question 14

Cash Flow statement cannot help in judging the profitability of the enterprise because it just tell about the cash inflows and outflows.

Test: Cash Flow Statement - 2 - Question 15

Which activity is the main revenue generating activities of the enterprises

Detailed Solution for Test: Cash Flow Statement - 2 - Question 15

The main revenue generating activity is the operating activities.

Test: Cash Flow Statement - 2 - Question 16

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

Detailed Solution for Test: Cash Flow Statement - 2 - Question 16

Decrease in current assets (inventory) will be added while calculating cash flow from operating activities.

Test: Cash Flow Statement - 2 - Question 17

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

Detailed Solution for Test: Cash Flow Statement - 2 - Question 17

When provision for depreciation account is maintained separately in such a case at the time of sale of asset two accounts are prepared (i) Asset Account (ii) Provision for Depreciation Account or Accumulated Depreciation Account.

Test: Cash Flow Statement - 2 - Question 18

Operating activities is mainly concerned with …..

Detailed Solution for Test: Cash Flow Statement - 2 - Question 18

Operating activities is mainly concerned with current assets and current liabilities.

Test: Cash Flow Statement - 2 - Question 19

Decrease in the value of Trade Receivable will be ……..

Detailed Solution for Test: Cash Flow Statement - 2 - Question 19

Decrease in the value of Trade Receivables will be added in operating activities while preparing cash flow statement.

Test: Cash Flow Statement - 2 - Question 20

Purchase and Sales of Shares by a manufacturing company comes under ______

Detailed Solution for Test: Cash Flow Statement - 2 - Question 20

Purchase and Sales of Shares by a manufacturing company comes under Investing activities.

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