NCERT Class 12 Accountancy MCQ Chapter 10 Cash Flow Statement Solutions, AHSEC Class 12 Accountancy Multiple Choice Question Answer to each chapter is provided in the list so that you can easily browse throughout different chapters NCERT Class 12 Accountancy MCQ Chapter 10 Cash Flow Statement Question Answer and select needs one.
NCERT Class 12 Accountancy MCQ Chapter 10 Cash Flow Statement
Also, you can read the SCERT book online in these sections NCERT Class 12 Accountancy Multiple Choice Solutions by Expert Teachers as per SCERT (CBSE) Book guidelines. AHSEC Class 12 Accountancy MCQ Solutions. These solutions are part of SCERT All Subject Solutions. Here we have given HS 2nd Year Accountancy Objective Type Question Answer for All Subjects, You can practice these here.
Cash Flow Statement
Chapter: 10
| PART – ⅠⅠ |
MULTIPLE CHOICE QUESTION ANSWER
1. According to the Companies Act, 2013, which of the following standards govern the preparation of the Cash Flow Statement?
(i) Accounting Standards-4 (AS-4).
(ii) Accounting Standards-2 (AS-2).
(iii) Accounting Standards-3 (AS-3).
(iv) Accounting Standards-5 (AS-5).
Ans: (iii) Accounting Standards-3 (AS-3).
2. Which of the following is the key classification in a Cash Flow Statement?
(i) Operational, financial, and non-financial activities.
(ii) Operating, investing, and financing activities.
(iii) Profit and loss, liabilities, and assets.
(iv) Operating, marketing, and sales activities.
Ans: (ii) Operating, investing, and financing activities.
3. Under AS-3, which of the following is a cash flow from investing activities?
(i) Purchase of fixed assets.
(ii) Depreciation of machinery.
(iii) Provision for bad debts.
(iv) Increase in accounts receivable.
Ans: (i) Purchase of fixed assets.
4. What is the significance of preparing a Cash Flow Statement?
(i) It helps to assess the liquidity, solvency, and financial flexibility of an enterprise.
(ii) It provides detailed information on the company’s equity.
(iii) It helps to assess the operating income of the company.
(iv) It is used to calculate the company’s profitability.
Ans: (i) It helps to assess the liquidity, solvency, and financial flexibility of an enterprise.
5. Which of the following activities are included in the Cash Flow Statement?
(i) Operating activities.
(ii) Investing activities.
(iii) Financing activities.
(iv) All of the above.
Ans: (iv) All of the above.
6. Which of the following is NOT a category in the Cash Flow Statement?
(i) Operating activities.
(ii) Investing activities.
(iii) Financing activities.
(iv) Budgeting activities.
Ans: (iv) Budgeting activities.
7. Which of the following represents the net cash flow from investing activities?
(i) ₹60,000 outflow.
(ii) ₹25,000 outflow.
(iii) ₹35,000 inflow.
(iv) ₹25,000 inflow.
Ans: (ii) ₹25,000 outflow.
8. In the Cash Flow Statement, which of the following is classified under operating activities?
(i) Proceeds from issuing shares.
(ii) Payment for dividends.
(iii) Cash inflows from sales of goods.
(iv) Payment for acquisition of fixed assets.
Ans: (iii) Cash inflows from sales of goods.
9. If a company has a net income of ₹50,000, depreciation of ₹10,000, and an increase in working capital of ₹5,000, what will be the net cash flow from operating activities using the indirect method?
(i) ₹55,000.
(ii) ₹40,000.
(iii) ₹40,000.
(iv) ₹30,000.
Ans: (i) ₹55,000.
10. Which of the following investments would not be classified as cash equivalents under AS-3?
(i) Treasury bills with a 3-month maturity.
(ii) Short-term government securities that are readily convertible into cash.
(iii) Commercial paper with a maturity of 6 months.
(iv) Demand deposits with a bank.
Ans: (iii) Commercial paper with a maturity of 6 months.
11. The company’s opening cash balance was ₹30,000, and its closing cash balance was ₹50,000. If the net cash flow for the period was ₹25,000, what was the cash inflow for the period?
(i) ₹20,000
(ii) ₹15,000
(iii) ₹25,000
(iv) ₹30,000
Ans: (iii) ₹25,000
12. If a company sells equipment worth ₹50,000 at book value and receives ₹45,000 in cash, how should this be classified in the Cash Flow Statement?
(i) Cash inflow from operating activities of ₹45,000.
(ii) Cash inflow from investing activities of ₹45,000.
(iii) Cash inflow from financing activities of ₹50,000.
(iv) Cash inflow from investing activities of ₹50,000.
Ans: (ii) Cash inflow from investing activities of ₹45,000.
13. What does “cash inflow” refer to in a cash flow statement?
(i) Payment to suppliers.
(ii) Receipt of cash from the sale of assets.
(iii) Purchase of machinery.
(iv) Payment of wages.
Ans: (ii) Receipt of cash from the sale of assets.
14. A company received ₹50,000 from issuing shares. This transaction will be classified under which section of the Cash Flow Statement?
(i) Operating Activities.
(ii) Investing and non-financing Activities.
(iii) Financing Activities.
(iv) Non-cash Activities.
Ans: (iii) Financing Activities.
15. According to AS-3, which of the following activities is NOT classified in a cash flow statement?
(i) Operating and investing activities.
(ii) Investing activities.
(iii) Financing activities.
(iv) Non-cash activities.
Ans: (iv) Non-cash activities.
