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Question: Increase in current liabilities like accounts payable, accrued liabilities, income tax payable etc. are _________ under indirect method.
Options:
A.Not treated
B.Added
C.Subtracted
D.None of these
Answer: Option B
: B

Increase in current liabilities like accounts payable, accrued liabilities, income tax payable etc. are added under indirect method.

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Question 1. Short term highly liquid investments that are readily convertible in to known amounts of cash and which are subject to insignificant risk of changes in value is known as ___
  1.    Cash at bank
  2.    Investment in shares
  3.    Cash equivalents
  4.    None of these
Answer: Option C
: C

Short term highly liquid investments that are readily convertible in to known amounts of cash and which are subject to insignificant risk of changes in value is known as cash equivalents
Question 2. Purchase of machinery by means of issue of shares should be ___ from cash flow statement
  1.    Included
  2.    Excluded
  3.    Subtracted
  4.    None of these
Answer: Option B
: B

Purchase of machinery by means of issue of shares should be excluded from cash flow statement as it doesnot involve cash.
Question 3. Receipt of interest is to be _________ from net profit.
  1.    added
  2.    deducted
  3.    not to be treated
  4.    none of these
Answer: Option B
: B

Receipt of interest is to be deducted from net profit.

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