MCQ on Cash Flow Statement 2024 [AHSEC Class 12 MCQs Multiple Choice Questions and Answers]

 MCQ on Cash Flow Statement 2024
[AHSEC Class 12 MCQs Multiple Choice Questions and Answers]

A. State whether the following statements are true or false

a)   Cash flow statement forecasts inflow & out flow of cash.      FALSE

b) Cash flow statement closes by showing closing balance of cash. TRUE                              

c)       Cash flow statement is based on accrual basis of accounting.                FALSE   

d)      Cash flow statement is a substitute of cash account.                                 FALSE

e)      Cash from operation and funds from operation are same.      FALSE

f)        Increase in Security premium is a source of fund.                       TRUE

g)       Depreciation is a non-cash charge.            TRUE

h)      Decrease in current asset means inflow of cash.       TRUE

i) Dividend received by a non-financial institution is a financing activity.       FALSE

j)        Increase in current liability is an inflow of cash.                                           TRUE

k)       Marketable securities are a cash and cash equivalents.                           TRUE

B. Fill in the blanks with appropriate word/words.

1)      Cash flow statement is concerned with Flow in cash position.

2)      Cash flow helps in assessing the efficiency of managing cash.

3)      Cash flow statement considers only monetary items.

4)      Cash Comprises cash on hand and demand deposit with bank.

5)      Cash flow is useful for short term financial analysis.

6)      Cash flows are inflow & outflows of cash and cash equivalents.

7)      Reduction of Stock is an inflow of cash.

8)      Cash payment to acquire fixed assets will be treated as cash flow from investing activity.

9)      Raising of short term loan results in inflow of cash.

10)   Interest received by other than financial institution is an operating activity.

11)   Expenses paid in advance are to be deducted from profit for the preparation of cash flow statement.

12)   An increase in accrued income is deducted from the net profit for preparing cash flow statement.

Also Read: CHAPTERWISE MCQs (MULTIPLE CHOICE QUESTIONS AND ANSWERS)

C. Choose the correct alternatives:

1.       If the net profit eared during the year is Rs. 50,000/-, and the amount of the debtor at the beginning & at the end of the year are Rs. 10,000/- & Rs. 20,000/- respectively then cash form operating activity will be:

a)      Rs. 40,000/-

b)      Rs. 30,000/-

c)       Rs. 60,000/-

d)      Rs. 70,000/-

2.       Net profit during the year is Rs. 50,000/- and bills receivable are decreased by Rs. 10,000/-, then cash flow from operating activities:

a)       Rs. 40,000/-

b)      Rs. 50,000/-

c)       Rs. 60,000/-

d)      None of the above

3.       Cash flow statement classifies cash flows according to

a)       Operating & Non-operating flows.

b)      Investing and non-investing flows.

c)       Inflows & outflows.

d)      Operating, Financing & Investing activities.

4.       Which of the following is not the source of cash?

a)      Purchase of Fixed Assets.

b)      Sale of Fixed Assets.

c)       Fund from operations.

d)      Issue of Debenture. 

5.       Which of the following is not the application of cash?

a)      Increase in outstanding expenses.

Increase in prepaid expenses.

b)      Increase in Inventory.

c)       Increase in Bills Receivable.

6.       Cash from operation consist of:

a)       Operational Net Profit.

b)      Decrease in current assets.

c)       Increase in current liabilities.

d)      All of the above.

7.       While calculating cash from operation, which will be added to the net profit

a)       Depreciation.

b)      Goodwill written off.

c)       Creation of general reserves.

d)      All of the above.

8.       While calculating cash from operating activities, which will be added to the net profit

a)       Increase in Stock.

b)      Decrease in Stock.

c)       Increase in Debtors.

d)      Decrease in Creditors.

9.       Inflow of cash will take place due to:

a)      Increase in shares.

b)      Decrease in Capital.

c)       Increase in the value of land.

d)      Payment of tax.

10.   Which of the following are not a flow of cash?

a)       Issue of Bonus Shares.

b)      Purchase of fixed assets by issue of debenture.

c)       Conversion of debenture into stock.

d)      All of the above