CORPORATE ACCOUNTING (MCQS) - Study For Buddies

Saturday, January 23, 2021

CORPORATE ACCOUNTING (MCQS)

S.Y B.COM 
SEMESTER - IV

MID SEMESTER EXAMINATION
CORPORATE ACCOUNTING
(CA)
MCQS

CASH FLOW STATEMENT

(1) Cash Flow statement is also known as

(A) Statement of changes in Financial position on cash basis
(B) Statement accounting for variation in cash
(C) Both A and B
(D) None of the above

(2) The objectives of cash flow statement are

(i) Analysis of cash position
(ii) Short-term cash planning
(iii) Evaluation of liquidity
(iv) Comparison of operating performance

(A) Both (i) and (ii)
(B) Both (i) and (iii)
(C) Both (ii) and (iv)
(D) (i) (ii) (iii) (iv)

(3) In cash flow statement, the item of interest is shown in

(i) Operating Activities
(ii) Financing Activities
(iii) Investing Activities

(A) Both (i) and (ii)
(B) Both (i) and (iii)
(C) Both (ii) and (iii)
(D) (i) (ii) (iii)

(4) Which of the following statements are false?

(i) Cash Flow statement is helpful in the formation of policies
(ii) Cash Flow statement is useful for external analysis
(ii) Cash Flow statement is helpful in estimating future cash flow

(A) Both (i) and (ii)
(B) Both (i) and (iii)
(C) Both (ii) and (iii)
(D) None of the above

(5) Which of the following statements are true ?

(i) Cash flow reveals only the inflow of cash
(ii) Cash flow reveals only the outflow of cash
(iii) Cash flow is substitute for income statement
(iv) Cash flow statement is not a replacement of funds flow statement

(A) Only (i)
(B) Only (ii)
(C) Both (ii) and (iii)
(D) Only (iv)

(6) In a statement of cash flows, a company investing in short-term financial investments and in fixed assets results in

(A) Increase cash
(B) Decreased cash
(C) Increased liabilities
(D) increased equity

(7) A company who issues bonds or stocks in result reaised funds which finally

(A) Decrease cash
(B) Increase liabilities
(C) Increase equity 
(D) Increase cash

(8) Which of the following is not one of the major sections of the statement of cash flows?

(A) Cash flows from financing activities 
(B) Cash flows from selling activities
(C) Cash flows from operating activities
(D) Cash flows from investing activities

(9) Principal revenue generating activities of an enterprise are called as -

(A) Investing Activities
(B) Operating Activities
(C) Financial activities
(D) None of the above

(10) Short term highly liquid investments that are readily convertible in to known amounts of cash and which are subjects to insignificant risk of changes in value is known as -

(A) Investments in Shares
(B) Cash at Bank
(C) Cash Equivalents
(D) None of the above

(11) Cash Flows are

(A) Inflows and Outflows of cash equivalents
(B) Inflows and outflows of cash
(C) Inflows of cash
(D) Both A & B

(12) Purchase of Machinery by means of issue of shares should be.......... from Cash flow statement.

(A) Excluded 
(B) Included with value as zero
(C) Included
(D) None of the above

(13) Unrealized gains and losses arising from foreign exchange rates are -

(A) Cash flows from operating activities
(B) Cash flows from financing activities
(C) Cash flows from investing activities
(D) Not cash flows

(14) Equity dividend paid should be classified as cash outflow from-

(A) Financing activities
(B) Operating activities
(C) Not cash flows
(D) Investing activities

(15) Which of the following categories is not used to classify cash flows in the cash flow statement?

(A) Operating activities.
(B) Managing activities
(C) Financing activities
(D) Investing activities

(16) Activities that involve providing and collecting cash as a lender or as an owner of shares and acquiring and disposing of fixed assets are included in which section of the cash flow statement?

(A) Investing activities
(B) Operating activities
(C) Managing activities
(D) Financing activities

(17) Which of the following items will not appear in the cash flow from operating activities section when using the direct method?

(A) Payments to suppliers
(B) Payments to employees
(C) Collections from customers
(D) Net income

(18) Which of the following items is not considered as cash or cash equivalent ?

(A) Demand deposits
(B) Bank borrowings
(C) Cash on hand
(D) Investments with a maturity of two months from the date of acquisition

(19) All of the following would be included in a company's operating acitivities except:

(A) Collections from customers
(B) Income tax payments
(C) Dividend payments
(D) Cash payments to suppliers

(20) Which of the following items is not a non-cash item?

(A) Amortization expense
(B) Depreciation expenses
(C) Income tax payment
(D) Reversal of provision

(21) As per Accounting standard-3, Cash flow is classified into

(A) Operating activities and investing activities
(B) Investing activities and financing activities
C)Operating activities and financing activities
(D) Operating activities, financing activities and investing activities

(22) The net cash provided by operating activities is affected by

(A) A change in merchandise inventory
(B) A purchase of land for cash
(C) The issue of bonds payable for cash
(D) Proceeds of cash investments by stockholders

(23) Investing activities include

(A) Purchase of merchandise for cash
(B) Purchase of plant and equipment for cash
(C) Purchases of prepaid expense items such as supplies and insurance for cash
(D) Increase in accounts receivable

(24) An example of a financing activity is

(A) The issue of stock for cash
(B) The sale of merchandise for cash
(C) The sale of used equipment for cash (D) The purchase of a building

(25) On a statement of cash flows, depreciation expenses is

(A) Subtracted from net income in the computation of the net cash provided by operating activities
(B) Added to net income in the computation of the net cash provided by operating activities
(C) Treated as a cash outfow in the computation of the net cash used in investing activities
(D) Treated as a cash Inflow in the computation of the net cash used in investing activities

(26) Non cash investing and financing activities which may have significant effect on future cash flows are reported:

(A) In the statement of cash flows
(B) In a separate schedule to accompany the statement of cash flows
(C) In the retained earnings statement
(D) In a footnote accompanying the balance sheet

(27) A loss on the sale of land is reflected on the statement of cash flows by:

(A) Adding the loss to the book value of the land to determine the cash flow from investing activities
(B) Deducting the loss from net income to determine the cash flow from operating activities
(C) Deducting the loss from the book value of the lad to determine the cash flow from investing activities
(D) both b and c

(28) Cash payments for income taxes are included on the statement of cash flows as:

(A) Financing activities
(B) Investing activities
(C) Operating activities
(D) Non-operating activities

(29) To convert the cost of merchandise sold as reported on the income statement to cash payments for merchandise, the cost of merchandise sold is increased for the:

(A) Increase in inventories
(B) Increase in accounts payable
(C) Decrease in inventories
(D) Decrease in accounts receivable

(30) Which of the following would not be considered a noncash investing and financing activity in preparing a statement of cash flows?

(A) Withdrawal of cash by the owner of a business
(B) Issuance of common stock to retire long-term debt
(C) Acquisition of a manufacturing plant by issuing bonds
(D) Issuance of cornmon stock in exchange for convertible preferred stock

(31) An example of a cash flow from a financing activity is

(A) Receipt of cash from sale of land
(B) Receipt of cash from collection of accounts receivable
(C) Payment of cash for acquisition of treasury stock
(D) Payment of cash for new machinery

(32) Which of the following items appears first on the statement of cash flows prepared using the direct method?

(A) Retained earnings
(B) Cash received from customers
(C) Net income
(D) Depreciation

(33) Under the direct method, which of the following items must be added to operating expenses reported on the income statement to determine cash payments for operating expenses?

(A) Increase in accrued expenses
(B) Decrease in prepaid expenses
(C) Increase in income taxes payable
(D) Increase in prepaid expenses

(34) Under the indirect method, which of the following items must be deducted from reported net income to determine net cash flow from operating activities ?

(A) Depreciation of fixed assets
(B) Decrease in current assets
(C) Decrease in current liabilities
(D) Loss on sale of equipment

(35) How many activities are there in cash flow statement?

(A) Five
(B) Four
(C) Two
(D) Three

(36) Cash equivalent has.......

(A) Higher liquidity
(B) Higher solvency
(C) Higher profitability
(D) All of the above

(37) Decrease in current assets and increase in current liabilities......

(A) Are cash inflow and cash outflow respectively
(B) Are cash outflow and cash Inflow respectively
(C) Both are cash inflows
(D) Both are cash outflows

(38) Increased in current assets and decrease in current liabilities............

(A) Both are cash inflows
(B) Both are cash outflows
(C) Are cash outflow and cash inflow respectively
(D) Are cash inflow and cash outflow respectively

(39) Collection of debtors and bills receivable is...........

(A) Cash outflow of operating activity
(B) Cash inflow of operating activity
(C) Cash inflow of investing activity
(D) Cash inflow of financing activity

(40) Which of the following transaction is always transaction of operating activity ?

(A) Interest paid on loan
(B) Dividend received
(C) Dividend paid
(D) Salary expense

(41) Dividend or interest received on investment is......

(A) Added to cash flow of operating activity
(B) Deducted from cash flow or financing activity
(C) Added to cash flow of Investing activity
(D) Deducted  from cash flow of investing activity

(42) Bank overdraft........

(A) Is current liability but considered as financing activity
(B) Is current liability but considered as operating activity
(C) Is current liability but considered as investing activity
(D) Is not activity of cash flow statement

(43) Rent received.......

(A) Is added to operating activity and deducted from financing activity
(B) Is added to operating activity and added to financing activity
(C) Is added to operating activity and added to investing activity
(D) Is deducted from operating activity and added to investing activity

(44) Reduction in goodwill in current year as compared to previous year is .......

(A) Sale of goodwill
(B) Purchase of goodwill
(C) Written off goodwill
(D) All of the above

(45) Cash deposited in bank is.....

(A) Cash outflow of financing activity
(B) Cash outflow of operating activity
(C) Not cash flow
(D) Cash outflow of investing activity

(46) Which of the following is included in financial expense?

(A) Administrative expenses
(B) Factory expenses
(C) Interest expenses
(D) Sales expenses

(47) Payment of interim dividend is......

(A) Deducted from operating statement and added to financing activity
(B) Deducted from operating statement and added to investing activity
(C) Added to operating statement and deducted from financing activity
(D) None of the above

(48) Payment to creditors and for bills payable means.....

(A) Cash inflow of operating activity 
(B) Cash outflow of operating activity
(C) Cash outflow of financing activity
(D) Cash outflow of investing activty

(49) Increase ih current assets and decrease in current liabilities means..…

(A) Both are cash outflow
(B) Both are cash inflow
(C) Non-cash activity
(D) Non-operating activity

(50) Which of the following is always trarnsaction of financing activities ?

(A) Interest paid on debt
(B) Dividend payment
(C) Buy back of equity shares
(D) All of above

(51) Cash withdraw from bank  is ...

(A) Not cash flow
(B) Cash inflow of investing activities
(C) Cash outflow of financing activities
(D) Cash inflow of operating activities

(52) Which of the following is included in the operating activities?

(A) Sales distribution expense
(B) Income tax paid
(C) Factory expense
(D) All the above

(53) Which of the following is included in the investing activities?

(A) Amount paid for intangible assets
(B) Sale or purchase of tangible assets
(C) Purchase or sale of investments
(D) All the above

(54) Which of the following is an example of Non-operating incomes ?

(A) Rent for properties
(B) Sale of machine
(C) Commission received 
(D) Cash balance

(55) Current assets and current liabilities are result of .....

(A) Operating activities
(B) Financing activities
(C) Investing activities
(D) None of the above

(56) Self-constructed assets is an example of .....

(A) Cash inflow of operating activities
(B) Cash outflow of investing activities
(C) Cash outflow of investing activities
(D) Cash outflow of financing activities

(57) Issue of shares/ debentures/ preference shares is an example of......

(A) Cash outflow of financing activities
(B) Cash inflow of financing activities
(C) Cash inflow of operating activities
(D) Cash inflow of investing activities

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