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1. Dividend paid by a finance company is categorized as:

(a) Operating Activity     (b) Investing Activity

(c) Financing Activity       (d) None of the above

Ans:       (c) Financing Activity      

 

2. State whether cash deposited into bank will result in inflow, outflow or no flow of cash?

(a) No flow         (b) Out flow

(c) In flow            (d) Inflow and Outflow both

Ans:       (a) No flow        

 

3. From the following information, calculate cash flow from investing activities?

31 March, 2018  31 March, 2019

Land (at cost)     ₹ 10,00,000         ₹ 8,00,000

Additional Information:

Land was sold at a profit of ₹ 1,60,000.

(a) Inflow of ₹ 3,60,000  (b) Inflow of ₹ 1,60,000

(c) Inflow of ₹ 2,00,000  (d) Inflow of ₹ 9,60,000

Ans:       (a) Inflow of ₹ 3,60,000 

4. Balance of 12% Debentures A/c March 31, 2018            March 31, 2019

₹ 2,00,000            ₹ 1,60,000

Additional Information:

Debentures are redeemed on December 31, 2018. How much amount is shown in financing activity

(a) Inflow of ₹ 62,800     (b) Outflow of ₹ 64,000

(c) Outflow of ₹ 40,000  (d) Outflow of ₹ 62,800

Ans:       (d) Outflow of ₹ 62,800

 

 

5. Which one of the following is not an objective of Cash flow statement?

(a)  Helps in Taking loan

                (b) Helps in financial Planning

(c) Helps in making dividend decisions

(d) Helps in the preparation of financial Statements of the company

Ans:       (d) Helps in the preparation of financial Statements of the company      

 

6. Which one of the following would be considered a “Use” of cash for purposes of constructing a statement of cash flows?

(a) A decrease in accounts receivable.

(b An increase in accounts payables.

(c)Decrease in public deposits.

(d)An increase in share capital.

 

Ans:       (c) Decrease in public deposits.

7. From the following particulars, what will be the amount of provision for tax made during the year?

31 March, 2018  31 March, 2019 Provision for Taxation     ₹ 50,000               ₹ 40,000

The Company paid taxes ₹ 45,000 for the year 2018-2019.

(a) ₹ 45,000                         (b) ₹ 35,000

(c) ₹ 40,000                         (d) ₹ 50,000

Ans:       (b) ₹ 35,000       

8. From the following information, the outflow of cash for the purchase of machinery will be:

Written down value of machinery as on 1.4.2018               ₹ 5,00,000 Written down value of machinery as on 31.3.2019             ₹ 7,00,000 Depreciation on machinery charged during the year   ₹ 60,000 Machinery having book value ₹ 25,000 sold for ₹ 20,000

(a) ₹ 2,70,000                     (b) ₹ 2,80,000

(c) ₹ 2,75,000                     (d) ₹ 2,85,000

Ans:       (d) ₹ 2,85,000

               

 

 

9. Which of the following transactions would result inflow of cash:

(a) Cash withdrawn from Bank for office use.

(b) Purchase of machinery worth ₹ 2,00,000 and issued shares in consideration thereof.

(c) Sale of furniture for ₹ 3,000 to Mr. Mohan on creadit

(d) Cash received from Debtors ₹ 6,000

Ans:       (d) Cash received from Debtors ₹ 6,000

10. From the following information find the cash generated from operations:

Operating Profit before working capital changes Depreciation on fixed assets

Loss on sale of Furniture               ₹ 1,00,000

₹ 15,000

₹ 5,000

Interest paid      ₹ 13,000

Dividend received           ₹ 12,000

Increase in debtors         ₹ 8,000

Decrease in stock             ₹ 7,000

Increase in creditors       ₹ 4,000

(a) ₹ 1,18,000     (b) ₹ 1,24,000

(c) ₹ 1,03,000     (d) ₹ 1,00,000

Ans:       (c) ₹ 1,03,000    

11. Which of the following transactions would result in neither inflow nor outflow of cash and cash Equivalents?

(a) Issue of share capital               (b) Redemption of debentures

(c) Issue of Bonus shares              (d) Trade receivables realised

 Ans:      (c)  Issue of Bonus shares            

 

 

12. Gain on sale of tangible non current assets is:

(b) An operating activity                               (b) An Investing activity

(c) A financing activity                    (d) Cash and cash equivalent

Ans:       (b) An Investing activity

13.          As on 1.4.2018 the book value of  a  machinery is  ₹ 4,50,000 and  as on 31.03.2019 it is ₹ 6,60,000. During the year company had charged depreciation of ₹ 1,36,000 and it had also sold some machinery for ₹ 3 75,000, being 150% of its book value. Determine the Net inflow/outflow of cash and cash equivalent

(a) ₹ 2,21,000 outflow    (b) ₹ 2,96,000 outflow

(c) ₹ 2,96,000 inflow        (d) ₹ 2,49,000 inflow

Ans:       (a) ₹ 2,21,000 outflow

14.          Particulars           31 March, 2018  31 March, 2019 Share Capital      ₹ 5,00,000            ₹ 7,50,000

9% Debentures ₹ 3,00,000            ₹ 1,80,000

Additional Information

Debentures worth ₹ 50,000 redeemed by converting into shares. Calculate the inflow/outflow of cash and cash equivalents from Financing activity

(a) Net inflow ₹ 2,50,000               (b) Net inflow ₹ 1,30,000

(c) Net inflow ₹ 70,000                   (d) Net outflow ₹ 1,20,000

Ans:       (b) Net inflow ₹ 1,30,000             

15. Which of the following transactions would not create a cash flow ?

(a) A company purchased some of its own stock from a stockholder

(b) Amortization of a patent

(c) Payment of a Cash Dividend

(d) Sale of equipment at book value

Ans:       (b) Amortization of a patent      

16. Bank Overdraft and cash credit are to be treated as:

(a) Cash Equivalents                       (b) Operating Activities

(c) Investing Activity                       (d) Financing Activities

Ans:       (d) Financing Activities

               

 

17. From the following information find out the inflow of cash

31st March, 2019              31st March, 2018

Office Equipment            ₹ 60,000                               ₹ 1,00,000

Additional Information

Depreciation for the year 2018-19 is ₹ 7,000 Purchase of office Equipment during the year 10,000 Part of Office Equipment sold at a profit of ₹ 6,000

(a) ₹ 48,000                                         (b) ₹ 49,000

(c) ₹ 44,000                                         (d) ₹ 33,000

Ans:       (b) ₹ 49,000       

18. Payment of Final Dividend would result in

(a) Operating Activity.

(b) Out flow in Operating activities.

(c) Inflow in Operating activities.

(d) No Flow of cash.

Ans:      (a) Operating Activity

19. Under which type of activity will you classify “Rent received on property” by DLF Real Estate Company while preparing Cash Flow Statement?

(a) Operating Activity     (b) Investing Activity

(c) Financing Activity       (d) Cash and Cash equivalents

Ans:       (a) Operating Activity    

20. From the following information find out the cash out flow from financing activities.

Year-I                    Year-II

12% Debentures                              ₹ 4,00,000            ₹ 5,00,000

Additional Information

Additional Debentures were issued at the end of year. Interim Dividend paid ₹ 50,000. Preference Share capital issued ₹ 2,00,000.

(a) ₹ 2,18,000                     (b) ₹ 2,02,000

(c) ₹ 2,38,000                     (d) ₹ 2,48,000

Ans:       (b) ₹ 2,02,000

                21. From the following information find out the in flow of cash

31st March, 2019              31st March, 2018

Plant and Machinery Account   ₹ 6,00,000             ₹ 4,50,000

Accumulated Depreciation          ₹ 1,60,000            ₹ 1,00,000

Additional Information

Depreciation for the year 2018-19 is ₹ 80,000. During the year Machinery was Purchased for ₹ 2,50,000 and a part of asset was sold at a profit of ₹ 40,000.

(a) ₹ 1,20,000                     (b) ₹ 1,00,000

(c) ₹ 80,000                         (d) ₹ 40,000

Ans:       (a) ₹ 1,20,000                    

22. Which of the following transaction will not affect Cash Flow Statement?.

(a) Depreciation charged on Fixed Assets ₹ 15,00,000

(b) Machinery of book value ₹ 10,00,000 was sold for ₹ 12,00,000

(c) Goods purchased in Cash ₹ 15,00,000

(d) Redemption of Debentures ₹ 5,00,000

Ans:      (a) Depreciation charged on Fixed Assets ₹ 15,00,000

                23. Expenses paid in advance at the end of the year are (i) from (ii) activities while preparing Cash Flow Statement.

(a)(i) Added (ii) Operating            (b) (i) Subtracted (ii) Operating

(c) (i) Added (ii) Investing             (d) (i) Subtracted (ii) Investing

Ans:       (b) i) Subtracted (ii) Operating

                24. While computing Cash from operating Activities, which of the following items will be added?

(a) Increase in value of Patents

(b) Increase in value of Building

(c) Decrease in value of Inventories

(d) Increase in value of Trade Receivables

 Ans:      (c) Decrease in value of Inventories

 

25. Dividend received by Aflatoon Enterprises Ltd., which is manufacturing concern will be (i) for the organistaion and will be shown under .........

(ii) Activities.

(a) (i) Inflow (ii) Financing             (b) (i) Outflow (ii) Financing

(c) (i) Inflow (ii) Operating            (d) Net Outflow ₹ 1,60,000

Ans:      (d) Net Outflow ₹ 1,60,000

26. If net profits made during the year was ₹ 55,000. There was a part of Machinery costing ₹ 1,00,000 (Book value ₹ 75,000) was sold for ₹ 60,000. Another Machinery was purchased for ₹ 2,00,000. Goodwill also increased from ₹ 80,000 to ₹ 1,00,000. What will be Cash from Investing Activities from the above information?

(a)Net Outflow ₹ 1,60,000            (b) Net Outflow ₹ 1,05,000

(c) Net Outflow ₹ 1,20,000           (d) Net Inflow ₹ 55,000

Ans:      (a) Net Outflow ₹ 1,60,000

27. Shares of ₹ 2,50,000 were issued at 10% premium to vendors, from whom Assets were purchased of ₹ 4,00,000. Balance amount was paid by cheque to the Vendor. By what amount, it will affect the Investing Activities of the company?

(a) ₹ 4,00,000                                     (b) ₹ 1,25,000

(c) ₹ 5,25,000                                     (d) ₹ 2,75,000

Ans:      (b) ₹ 1,25,000

28. Pick the odd one out from the following in context of calculation of Cash from Operating Activities by Indirect method.

(a) Decrease in Inventory             (b) Increase in Trade Payables

(c) Interest on Investment          (d) Interest on Loans

Ans:      (c) Interest on Investment

29. What will be the amount of Net Cash flow from Investing Activities from the following information?

Balance of Machinery on 31st March, 2018 ₹ 2,40,000.

Balance of Machinery on 31st March 2019, ₹ 4,50,000.

During the year a part of Machinery costing ₹ 60,000 (Depreciation charged till date on sale ₹ 20,000) was sold for ₹ 25,000. Depreciation charged during the year 2018-19 was ₹ 50,000.

(a) Outflow ₹ 2,75,000                   (b) Outflow ₹ 3,00,000

(c) 0Outflow ₹ 2,60,000                 (d) Outflow ₹ 2,95,000

Ans:       (a) Outflow ₹ 2,75,000  

30. What will be the effect of issue of Bonus shares on Cash Flow Statement?

(a) No effect                                      (b) Increase in Financing Activity

(c) Increase in Operating activity (d) Increase in Investing Activity

Ans:       (a) No effect

31. Why is Depreciation charged during the year is added while calculating Cash Flow from operating Activities?

(a)It is Non-Cash Expenses.         (b) It is a non operating expense.

(c) It is extraordinary item            (d) It is apportionment of Profits.

Ans:      (a) It is Non-Cash Expenses.        

32. Which type of activity does Cash Credit belongs to while preparing Cash Flow Statement?

(a) Operating Activity                     (b) Investing Activity

(c) Financing Activity                       (d) Cash and Cash Equivalent

Ans:       (c) financing Activity