Lakshya Education MCQs

Question: For non-financing company, the payment of interest is a/an _______
Options:
A.Operating activity
B.Investing activity
C.Financing activity
D.None of these
Answer: Option C
: C

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

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More Questions on This Topic :

Question 1. In the long run, a business must generate positive net cash flow from which of the following activities, if it is to survive?
  1.    Operating activities
  2.    Investing activities
  3.    Financing activities
  4.    Non cash activities
Answer: Option A
: A

In the long run, a business must generate positive net cash flow from operating activities, if it is to survive.
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. 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 4. 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.

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