Concepts In Preparation of Fund Flow Statement - MCQs

Concepts In Preparation of Fund Flow Statement - MCQs


1. Which of the following are applications of funds?

a) Payment of dividend on share capital
b) Payment of tax
c) Increase in working capital
d) All of above

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ANSWER: d) All of above



2. Which of the following are treated as long term investments?

a) Non-current investments
b) Trade Investments
c) Sinking fund investments
d) All of the above

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ANSWER: d) All of the above



3. Provision of taxation is treated as

a) As a current liability
b) As an appropriation of profits
c) Either a or b
d) None of the above

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ANSWER: c) Either a or b



4. As per accounting standard AS3, provision for taxation should be treated as

a) As a current liability
b) As an appropriation of profits
c) Either a or b
d) None of the above

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ANSWER: b) As an appropriation of profits



5. Which of the following statement is true?

a) If the amount of good will increases during current year, the difference is treated as purchase of goodwill.
b) If the amount of good will decreases during current year, It will treated as written off.
c) Both a and b
d) None of the above

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ANSWER: c) Both a and b




6. The opening and closing balance of general reserves are Rs 10,000 and Rs 9,000, respectively. It is stated in addition information that a loss of Rs 1000 has been written off in general reserves. In such a case, decline in reserve and loss on investment will be adjusted in P&L account.

a) True
b) False

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ANSWER: b) False


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