Bihar Board 12th Accountancy Objective Answers Chapter 11 Cash Flow Statement

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