Top 150+ Solved Cash Flow MCQ Questions Answer
Q. In cash flow statement, the item of interest is shown in A) Operating Activities B) Financing Activities C) Investing Activities
a. Both A and B
b. Both A and C
c. Both B and C
d. A, B, C
Q. 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
Q. Which of the following statements are false? A) Cash Flow Statement is helpful in the formation of policies. B) Cash Flow Statement is useful for external analysis C) Cash Flow Statement is helpful in estimating future cash flow
a. Both A and B
b. Both A and C
c. Both B and C
d. None of the above
Q. Which of the following statements are true?
a. Cash flow reveals only the inflow of cash
b. Cash flow reveals only the outflow of cash
c. Cash flow is a substitute for income statement
d. Cash flow statement is not a replacement of funds flow statement.
Q. Cash flow statement is based upon _________ while Funds Flow Statement recognizes _______.
a. Cash basis of accounting, accrual basis of accounting
b. Accrual basis of accounting, cash basis of accounting
c. Both are based on cash basis of accounting
d. None of the above
Q. Statement of changes in working capital is prepared separately in
a. Cash Flow Statement
b. Funds Flow Statement
c. Both a and b
d. None of the above
Q. _________ reconciles the opening cash balance with the closing cash balance of a given period on the basis of net decrease or increase in cash during that period.
a. Cash Flow Statement
b. Funds Flow Statement
c. Both a and b
d. None of the above
Q. Which of the following statements are true? A) Cash flow statement is more useful for short term cash planning. B) Funds Flow statement is more useful in planning medium term and long term financing. C) Cash Flow statement discloses the position of liquidity in a better way
a. Only A
b. Only B
c. Only C
d. A, B and C
Q. _____ has/have accepted cash flow statement is more useful than funds flow statement, particularly from view of analysis of liquidity of a firm.
a. Institute Of Chartered Accountants of India
b. FASB, America
c. SEBI
d. All of the above
Q. Time value of money indicates that
a. A unit of money obtained today is worth more than a unit of money obtained in future
b. A unit of money obtained today is worth less than a unit of money obtained in future
c. There is no difference in the value of money obtained today and tomorrow
d. None of the above
Q. Time value of money supports the comparison of cash flows recorded at different time period by
a. Discounting all cash flows to a common point of time
b. Compounding all cash flows to a common point of time
c. Using either a or b
d. None of the above.
Q. If the nominal rate of interest is 10% per annum and there is quarterlycompounding, the effective rate of interest will be:
a. 10% per annum
b. 10.10 per annum
c. 10.25%per annum
d. 10.38% per annum
Q. Relationship between annual nominal rate of interest and annual effective rate of interest, if frequency of compounding is greater than one:
a. Effective rate > Nominal rate
b. Effective rate < Nominal rate
c. Effective rate = Nominal rate
d. None of the above
Q. Mr. X takes a loan of Rs 50,000 from HDFC Bank. The rate of interest is 10% per annum. The first installment will be paid at the end of year 5. Determine the amount of equal annual installments if Mr. X wishes to repay the amount in five installments.
a. Rs 19500
b. Rs 19400
c. Rs 19310
d. None of the above