Cash Flow From Operating Activities - MCQs with answers

Cash Flow From Operating Activities - MCQs with answers


1. Cash Flow Statement is prepared from

a) Profit and loss account
b) Balance Sheet
c) Additional Information
d) All of the above

View Answer / Hide Answer

ANSWER: d) All of the above



2. Which of the following are cash flow from operating activities?

A) Cash Receipts from customers
B) Cash Paid to Supplier and Employees
C) Purchase of fixed assets
D) Sale of fixed assets

a) Both A and B
b) Both A and C
c) Both B and C
d) Both C and D

View Answer / Hide Answer

ANSWER: a) Both A and B



3. Match the column

A) Taxes Paid ------------------ i) Cash flow from investing activities
B) Repayment of loans -------------- ii) Cash flow from operating activities
C) Sale of fixed assets ----------------------- iii) Cash Flow from financing activities

a) A-ii), B-iii), C-i)
b) A-i), B-ii), C-iii)
c) A-iii), B-i), C-ii)

View Answer / Hide Answer

ANSWER: a) A-ii), B-iii), C-i)



4. Cash payment to suppliers for services and goods is example of cash outflow.

a) True
b) False

View Answer / Hide Answer

ANSWER: b) False



5. For the calculation of cash flow from operating activities, payments and receipts shown in Profit & Loss account are converted into payments and receipts actually in cash.

a) True
b) False

View Answer / Hide Answer

ANSWER: a) True



6. For the calculation of cash flow from operating activities, payments and receipts shown in Profit & Loss account are converted into payments and receipts actually in cash by eliminating

a) Non-cash revenue from the revenue earned
b) Non-cash expenses from expenses incurred
c) Both a & b
d) None of the above

View Answer / Hide Answer

ANSWER: c) Both a & b



7. While preparing Cash Flow Statement, non-cash items and non-operating items are not required to be adjusted under________

a) Indirect method
b) Direct method
c) Both a & b
d) None of the above

View Answer / Hide Answer

ANSWER: b) Direct method



8. Cash flow from sales is calculated by

a) Cash sales + Cash Collections
b) Sales + Opening debtors+ Opening B/R –Closing Debtors – Closing B/R
c) Both a and b
d) None of the above

View Answer / Hide Answer

ANSWER: c) Both a and b



9. Cash outflow on purchases is calculated by

a) Purchases + Opening Creditors + Opening B/P –Closing Creditors-Closing B/P
b) Purchases + Opening Creditors - Closing Creditors +Closing B/P
c) Purchases - Opening Creditors - Opening B/P + Closing Creditors +Closing B/P
d) None of the above

View Answer / Hide Answer

ANSWER: a) Purchases + Opening Creditors + Opening B/P –Closing Creditors-Closing B/P



10. The amount of operating expenses which are actually been paid in cash are shown under:

a) Cash flow from sales
b) Cash outflow on purchases
c) Cash outflow on expenses
d) All of above are false

View Answer / Hide Answer

ANSWER: c) Cash outflow on expenses



11. Given salary expenses Rs 40,000, Outstanding in the beginning of the year: Rs 5,000 and outstanding at the end of the year Rs 10,000. Cash outflow on salary will be:

a) Rs 45,000
b) Rs 35000
c) Rs 55,000
d) Rs 15,000

View Answer / Hide Answer

ANSWER: b) Rs 35000



12. In indirect method, net cash flow from operating activities is calculated on the basis of

a) Net Profit after tax
b) Net profit before tax
c) Both and b
d) None of the above

View Answer / Hide Answer

ANSWER: b) Net profit before tax



13. Which of the following are added to net profit after tax and extraordinary items to reach to net profit before tax and extraordinary items?

A) Provision for tax made during the year
B) Proposed dividend made during the year
C) Interim dividend
D) Transfer to General reserves and other reserves

a) Both A and B
b) Both A and C
c) Both B and C
d) A, B, C and D

View Answer / Hide Answer

ANSWER: d) A, B, C and D


Post your comment

You may like