Lakshya Education MCQs

Question: Cash Flow Statement useful for _____.
Options:
A.Short term financial planning only
B.Ascertaining cash flow from various activities separately only 
C.Both: Short term financial planning Ascertaining cash flow from various activities separately
D.None of these
Answer: Option C
: C

Cash flow statement useful for both short term financial planning and ​​​​ascertaining cash flow from various activities separately

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More Questions on This Topic :

Question 1. Decrease in current assets are ________ under indirect method.
  1.    Not treated
  2.    Added
  3.    Subtracted
  4.    None of these
Answer: Option B
: B

Decrease in current assets are added under indirect method.
Question 2. An example of cash flow from operating activity for financing company:
  1.    Payment of dividend
  2.    Sale of fixed assets
  3.    Payment of interest 
  4.    Issue of equity share capital
Answer: Option C
: C

Payment of interest is an example of cash flow from operating activity for financing company.
Question 3. An example of cash flow from investing activity is :
  1.    Issue of debenture
  2.    Repayment of long term loan
  3.    Purchase of raw materials for cash
  4.    Sale of investment by non-financial enterprise
Answer: Option D
: D

An example of cash flow from investing activity is sale of investment by non-financial enterprise.
Question 4. Cash proceeds from issue of shares will result in cash _________ from financing activities.
  1.    Inflow
  2.    Outflow
  3.    Either inflow or outflow
  4.    None of these
Answer: Option A
: A

Cash proceeds from issue of shares will result in cash inflow from financing activities.
Question 5. In the case of financial enterprises, the cash flow resulting from interest received should be classified as cash flow from ..............
  1.    Operating activities
  2.    Investing activities
  3.    Financing activities
  4.    None of these
Answer: Option A
: A

In the case of financial enterprises, the cash flow resulting from interestreceived should be classified as cash flow from operating activities.
Question 6. Which of the following would not be considered a cash flow from “operating” activities?
  1.    Payments for the inventory
  2.    Interest received on loans
  3.    Tax payments
  4.    Payment of debt principle
Answer: Option D
: D

Payment of debt principlewould not be considered a cash flow from “operating” activities

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