Top 50+ Solved Cash Flow Statement MCQ Questions Answer
Q. When a fixed asset is bought as hire purchase, interest element is classified under ______ and loanelement is classified under________.
a. operating activities, financing activities
b. financing activities, investing activities
c. investing activities, operating activities
d. none of the above
Q. 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.
Q. 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
Q. Cash flow statement is prepared for financial planning of
a. long range
b. medium range
c. short range
d. very long range
Q. Which of the following is not source of cash?
a. issue of shares
b. purchase of machinery
c. sale of asset
d. dividend received
Q. Which of the following is not application of cash?
a. increase in debtors
b. increase in inventory
c. increase in bills payable
d. increase in prepaid expenses
Q. How will you deal increase in the balance of ‘Securities Premium Reserve’ while preparing a Cash FlowStatement?
a. cash flow from operating activities
b. cash flow from investing activities
c. cash flow from financing activities
d. cash equivalent
Q. How will you treat Bank Overdraft in a Cash Flow Statement?
a. cash flow from operating activities ’
b. cash flow from investing activities
c. cash flow from financing activities
d. cash equivalent
Q. Where will you show purchase of Goodwill in a Cash Flow Statement?
a. cash flow from operating activities
b. cash flow from investing activities
c. cash flow from financing activities
d. cash equivalent
Q. How will you treat payment of ‘Interest on Debentures’ while preparing a Cash Flow Statement?
a. cash flow from operating activities
b. cash flow from investing activities
c. cash flow from financing activities
d. cash equivalent
Q. State whether cash deposited in bank will be classified under which kind of activity?
a. cash flow from operating activities
b. cash flow from investing activities
c. cash flow from financing activities
d. no cash flow