Top 1000+ Solved Financial Accounting MCQ Questions Answer
Q. Which of the following items will affect the flow of funds?
a. A transaction affecting both non – current accounts
b. A transaction affecting both current accounts
c. A transaction affecting current and non- current accounts
d. None of the above
Q. Cash from operations is equal to
a. Net profit plus decrease in current assets
b. Net profit plus decrease in current liabilities
c. Net profit plus bonus paid in the form of fully paid bonus shares
d. None of the above
Q. Increase in the amount of prepaid expenses results in
a. Increase in cash
b. Decrease in cash
c. No change in cash
d. None of the above
Q. Cash flow statement is based upon
a. Accrual basis of accounting
b. Cash basis of accounting
c. Both a and b
d. None of the above
Q. Increase in the amount of creditors results in
a. Decrease in cash
b. Increase in cash
c. No change in cash
d. None of the above
Q. Which statement is prepared in the process of funds flow analysis?
a. Schedule of changes in working capital
b. Funds Flow Statement
c. Both a and b
d. None of the above
Q. Funds Flow Statement is also known as
a. Statement of Funds Flow
b. Statement of Sources and Application of Funds
c. Statement of Sources and Uses of Funds
d. All of the above
Q. Which of the following transactions result in flow of funds?
a. Cash paid to creditors
b. Payment of bills payable
c. Issue of shares
d. Cash collected from debtors
Q. Which of the following transactions do not result in flow of funds?
a. Raising short term loans
b. Sale of fixed assets
c. Repayment of long term loans
d. Redemption of Debentures
Q. Redemption of preference share capital is shown in
a. Sources of funds
b. Application of funds
c. Funds from operation
d. All of the above
Q. ncrease in debtors causes ______________ in working capital.
a. Increase
b. Decrease
c. No change
d. None of the above
Q. Cash flow statement is based on _________ basis of accounting.
a. cash
b. accrual
c. direct
d. indirect
Q. Purchase of new machinery is shown in
a. Cash flow from Operating Activities
b. Cash flow from Financing Activities
c. Cash flow from Investing Activities
d. All of the above
Q. Depreciation is _________ from/to net profit in calculating funds from operation.
a. added
b. deducted
c. divided
d. all of the above
Q. Cash payment to suppliers for goods and services are classified as cash flow from ____________ activities.
a. operating
b. financing
c. investing
d. all of the above.