Bihar Board 12th Accountancy Objective Questions and Answers
Bihar Board 12th Accountancy Objective Answers Chapter 11 Cash Flow Statement
Question 1.
Cash Flow Statement in based upon:
(A) Cash basis of accounting
(B) Accrual basis of accounting
(C)(A) and (B) both
(D) None of these
Answer:
(A) Cash basis of accounting
Question 2.
Cash Flow Statement is related to:
(A) AS-3
(B) AS-6
(C) AS-9
(D) AS-12
Answer:
(B) AS-6
Question 3.
Cash Flow Statement Is prepared from:
(A) Balance Sheet
(B) Profit & Loss Account
(C) Additional Information
(D) All of these
Answer:
(D) All of these
Question 4.
Following Is included in Cash Flow from Operating Activities:
(A) Royalties, Fees, Commission
(B) Purchase of Debentures
(C) Purchase of Machinery
(D) issue of Shares
Answer:
(A) Royalties, Fees, Commission
Question 5.
Following are included in cash equivalent:
(A) Treasury Bill
(B) Trade Bill
(C) Bank Deposits of Short Maturity Period
(D) All of above
Answer:
(D) All of above
Question 6.
ClaIms received from Insurance Companies are treated as:
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) None of these
Answer:
(A) Cash Flow from Operating Activities
Question 7.
Which activity comes under ‘Operating Activities’ ?
(A) Purchase of Land
(B) Jssue of Debentures
(C) Proceeds from Issuance of Equity Shares
(D) Cash Sales
Answer:
(D) Cash Sales
Question 8.
Which of the following is not a cash inflow ?
(A) Decrease in Debtors
(B) Issue of Debentures
(C) Decrease in Creditors
(D) None of these
Answer:
(C) Decrease in Creditors
Question 9.
Which one of following is not a non-cash item ?
(A) Cash Sales
(B) Goodwill written off
(C) Depreciation
(D) Provision of Bad Debts
Answer:
(A) Cash Sales
Question 10.
Cash flow statement according to AS-3 is mandatory to:
(A) All enterprises
(B) Companies listed on a stock exchange
(C) Enterprises having turnover expending 50 Rs crore
(D) (B) & (C) both
Answer:
(D) (B) & (C) both
Question 11.
Decrease in Current Asset is……….in operating profit
(A) Subtracted
(B) Added
(C) Divided
(D) Multiplied
Answer:
(B) Added
Question 12.
Following are true about cash equivalent:
(A) More Liquid Short-term Investment
(B) Minimum risk
(C) Maturity of 3 months or les than 3 months
(D) All the above
Answer:
(D) All the above
Question 13.
Which of the following activity cames under Financial Activities ?
(A) Receipts from issurence of Equity Shares
(B) Cash Sales
(C) Bank Overdraft
(D) Purchase of Debentures
Answer:
(A) Receipts from issurence of Equity Shares
Question 14.
An analysis of cash flow is useful for..—.planning.
(A) Short-term
(B) Long-term
(C) Medium-term
(D) Very Long-period
Answer:
(A) Short-term
Question 15.
Which calculating cash flow from operating activities which is added net profit ?
(A) Increase in Stock
(B) Decrease in Stock
(C) Increase in Debtors
(D) Decrease in Creditors
Answer:
(B) Decrease in Stock
Question 16.
Which of the following is not the source of Cash ?
(A) Purchase of Fixed Assets
(B) Funds from Operations
(C) Issue of Debentures
(D) Sale of Fixed Assets
Answer:
(A) Purchase of Fixed Assets
Question 17.
While calculating profit from operating activities, which will be added back to net profit:
(A) Goodwill Written off
(B) Depreciation
(C) Loss oh Sale of Fixed Assets
(D) All the Above
Answer:
(D) All the Above
Question 18.
Profit during the year ₹ 20,000. During the year, there was increase in stock by ₹ 9,000 and decrease in debtores of ₹ 5,000. What is the amount of cash from operating activities ?
(A) ₹ 6,000
(B) ₹ 16,000
(C) ₹ 24,000
(D) ₹ 34,000
Answer:
(B) ₹ 16,000
Question 19.
Given:
Net Profit during the year ₹ 1,00,000
Debtors in the beginning the year of ₹ 30,000
Debotors at the end of the year ₹ 36,000
What is the amount of cash from operating activities ?
(A) ₹ 30,000
(B) ₹ 94,000
(C) ₹ 1,06,000
(D) ₹ 1,66,000
Answer:
(B) ₹ 94,000
Question 20.
Net Profit during the year ₹ 30,000
Creditors in the beginning ₹ 24,000
Creditors at the end ₹ 16,000
What is the amount of cash from operating activites :
(A) ₹ 30,000
(B) ₹ 34,000
(C) ₹ 22,000
(D) ₹ 40,000
Answer:
(C) 7 22,000
Question 21.
Redemption of Debentures/Preference shares results into:
(A) Source of fund
(B) Use Or application of fund
(C) No flow of fund
(D) No flow of cash
Answer:
(B) Use Or application of fund
Question 22.
Which of the following is not an example of cash outflows ?
(A) Repayment of loans
(B) Decrease in creditors
(C) Issue of debentures
(D) None of these
Answer:
(C) Issue of debentures
Question 23.
Preparation of cash flow statement is :
(A) Mondatory
(B) Recommendatory
(C) Required under the Companies Act
(D) None of these
Answer:
(A) Mondatory
Question 24.
Issue of shares in consideration of purchase of plant and machinery results into :
(A) Inflow of Cash
(B) Outflow of Cash
(C) Neither Inflow nor Outflow
(D) None of these
Answer:
(C) Neither Inflow nor Outflow
Question 25.
If net profit is 7 50,000 after writing off goodwill 7 10,000 then the cash flow from operating activities will be:
(A) ₹ 60,000
(B) ₹ 40,000
(C) ₹ 50,000
(D) ₹ 30,000
Answer:
(A) ₹ 60,000
Question 26.
If net profit is ₹ 35,000 after writing off good will ₹ 6,000 and loss on sale of fiimiture ₹ 1,000, cash flow from operating activities will be :
(A) ₹ 35,000
(B) ₹ 42,000
(C) ₹ 29,000
(D) ₹ 28,000
Answer:
(B) ₹ 42,000
Question 27.
Cash sales in :
(A) Operating Activity
(B) Investing Activity
(C) Financing Activity
(D) None of these
Answer:
(A) Operating Activity
Question 28.
Cash from operating activities will decrease due to :
(A) Increase in Current Assets
(B) Decrease in Current Liabilities
(C) Neither of the two
(D) Both (A) and (B)
Answer:
(D) Both (A) and (B)
Question 29.
Which of the following is an example of Cash Flow from Operating Activities ?
(A) Purchase of Machinery
(B) Issue of Shares
(C) Purchases of Inventory for Cash
(D) Purchases of Investment
Answer:
(C) Purchases of Inventory for Cash
Question 30.
While calculating operating profit which will be added to net profit:
(A) Interest received
(B) Profit on sale of Asset
(C) Increase in General Reserve
(D) Refund of Tax
Answer:
(C) Increase in General Reserve
Question 31.
While calculating cash flow from operating netivities which will be deducted ?
(A) Increase in Creditors
(B) Increase in Debtors
(C) Decrease in Debtors
(D) Decrease in Prepaid Expenses
Answer:
(B) Increase in Debtors
Question 32.
While calculating cash flow from operating activities, which will be added ?
(A) Increase in Stock
(B) Increase in Creditors
(C) Decrease in Bills Payable
(D) Increase in Debtors
Answer:
(B) Increase in Creditors
Question 33.
An example of Cash Flow from Investing Activities :
(A) Cash Sales
(B) Issue of Shares
(C) Payment of cash for purchase of machinery
(D) Payment of Dividend
Answer:
(C) Payment of cash for purchase of machinery
Question 34.
An example of Cash Flows from Financing Activity is :
(A) Sale of goods
(B) Sale of Investment
(C) Cash receipts from issue of shares
(D) Interest received
Answer:
(C) Cash receipts from issue of shares
Question 35.
How will you treat payment of ‘Interest of 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 Equivalents
Answer:
(C) Cash Flow from Financing Activities
Question 36.
Where will you show purchase of goodwill in Cash Flow Statement:
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) Cash Equivalent
Answer:
(B) Cash Flow from Investing Activities
Question 37.
Interest received by a finance company is classified under which kind of activity while preparing a Cash Flow Statement ?
(A) Cash Flow from Operating Activities
(B) Investing Activities
(C) Financing Activities
(D) Cash Equivalent
Answer:
(A) Cash Flow from Operating Activities
Question 38.
Which of the following item is considered as cash equivalents:
(A) Bank Overdraft
(B) Bills Receivable
(C) Debtors
(D) Short-term Investment
Answer:
(A) Bank Overdraft
Question 39.
Which of the following item is not considered as cash equivalents ?
(A) Bank Overdraft
(B) Commercial Papers
(C) Treasury Bills
(D) Investment
Answer:
(D) Investment
Question 40.
Cash payment to employees is a Cash Flow from:
(A) Operating Activities
(B) Investing Activities
(C) Finance Activities
(D) All the above
Answer:
(A) Operating Activities
Question 41.
Which of the following is not a Cash in Flow ?
(A) Sale of Fixed Asset
(B) Purchase of Fixed Asset
(C) Issue of Debentures
(D) Sale of Goods for Cash
Answer:
(B) Purchase of Fixed Asset
Question 42.
In cash flow statement, the item of ‘Interest’ is shown in:
(A) Operating Activities
(B) Investing Activities
(C) Financial Activities
(D) In both (D) & (C)
Answer:
(D) In both (D) & (C)
Question 43.
Which of the following is not a Cash Outflow:
(A) Increase in Creditors
(B) Increase in Debtors
(C) Increase in Stock
(D) Increase in prepaid expenses
Answer:
(A) Increase in Creditors
Question 44.
Cash from operation is equal to :
(A) Net Profit + Increase in Current Assets
(B) Net Profit + Decrease in Current Liabilities
(C) Operating Profit + Adjustment of Current Assets and Current Liabilities
(D) All of the above
Answer:
(B) Net Profit + Decrease in Current Liabilities
Question 45.
Income tax refund is a cash of:
(A) Source
(B) Application
(C) Both (A) & (B)
(D) None of these
Answer:
(A) Source