1) Cash Flow Statement is based upon
a. Cash basis of accounting
b. Accrual basis of accounting
c. Credit basis of accounting
d. None of the above
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Answer
Explanation
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ANSWER: Cash basis of accounting
Explanation:
No explanation is available for this question!
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2) Given salary expenses Rs 40,000, Outstanding in the beginning of the year: Rs 5,000 and outstanding at the end of the year Rs 10,000. Cash outflow on salary will be:
a. Rs 45,000
b. Rs 35,000
c. Rs 55,000
d. Rs 15,000
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Answer
Explanation
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ANSWER: Rs 35,000
Explanation:
No explanation is available for this question!
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3) Which of the following is not a cash inflow?
a. Decrease in debtors
b. Issue of shares
c. Decrease in creditors
d. Sale of fixed assets
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Answer
Explanation
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ANSWER: Decrease in creditors
Explanation:
No explanation is available for this question!
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4) For year 2013 Equity Share Capital is Rs 3,00,000 Preference Share Capital is 1,00,000 10% debentures is 2,00,000 and Share premium is 30,000. For year 2014 Equity Share Capital is Rs 4,00,000 Preference Share Capital is 60,000 10% debentures is 1,00,000 and Share premium is 40,000. Also given, Dividend paid on shares Rs 15,000 and Interest paid on debentures Rs 20,000. Determine net cash flow from financing activities.
a. Cash inflow of Rs 65,000
b. Cash outflow of Rs 65,000
c. Cash inflow of Rs 56,000
d. Cash outflow of Rs 56,000
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Answer
Explanation
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ANSWER: Cash outflow of Rs 65,000
Explanation:
No explanation is available for this question!
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5) Which of the following is not a cash outflow?
a. Increase in Prepaid expenses
b. Increase in debtors
c. Increase in stock
d. Increase in creditors
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Answer
Explanation
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ANSWER: Increase in creditors
Explanation:
No explanation is available for this question!
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6) Which of the following statements are false?
A) Old Furniture written off doesn’t affect cash flow.
B) Cash flow statement is a substitute for cash account.
C) Appropriation of retained earnings is not shown in Cash flow statement.
D) Net cash flow during a period can never be negative.
a. A, B, C
b. B, C, D
c. C, D, A
d. None of the above
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Answer
Explanation
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ANSWER: B, C, D
Explanation:
No explanation is available for this question!
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7) When a fixed asset is bought as hire purchase, interest element is classified under ______ and loan element is classified under________.
a. Operating activities, financing activities
b. Financing activities, investing activities
c. Investing activities, operating activities
d. None of the above
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Answer
Explanation
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ANSWER: Financing activities, investing activities
Explanation:
No explanation is available for this question!
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8) Issue of bonus shares and conversion of debentures into equity are shown as a footnote to the Cash Flow Statement.
a. True
b. False
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Answer
Explanation
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ANSWER: True
Explanation:
No explanation is available for this question!
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9) In case of other enterprises cash flow arising from interest paid should be classified as cash flow from ________ while dividends and interest received should be stated as cash flow from _______.
a. Operating activities, financing activities
b. Financing activities, investing activities
c. Investing activities, operating activities
d. None of the above
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Answer
Explanation
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ANSWER: Financing activities, investing activities
Explanation:
No explanation is available for this question!
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10) In the case of financial enterprises, the cash flow resulting from interest and dividend received and interest paid should be classified as cash flow from
a. Operating activities
b. Financing activities
c. Investing activities
d. None of the above
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Answer
Explanation
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ANSWER: Operating activities
Explanation:
No explanation is available for this question!
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