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Question 1. 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 2. 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 3. For non-financing company, the payment of interest is a/an _______
  1.    Operating activity
  2.    Investing activity
  3.    Financing activity
  4.    None of these
Answer: Option C
: C

For non-financing company, the payment of interest is a financing activity.

Question 4. Cash Flow Statement useful for _____.
  1.    Short term financial planning only
  2.    Ascertaining cash flow from various activities separately only 
  3.    Both: Short term financial planning Ascertaining cash flow from various activities separately
  4.    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

Question 5. 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 6. 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.