Free Cash Flow Statement 01 Practice Test - 12th Grade - Commerce
Question 1
The statement which show the cash situation is called:
Cash flow statement
Income statement
Balance sheet
None of these
SOLUTION
Solution : A
The statement which show the cash situation is called cash flow statement.
Question 2
A financial statement that shows the inflows and outflows of cash during a particular period of time is known as:
Income Statement
Statement of Retained Earnings
Balance Sheet
Statement of Cash Flows
SOLUTION
Solution : D
A financial statement that shows the inflows and outflows of cash during a particular period of time is known as statement of cash flows.
Question 3
Increase in current liabilities like accounts payable, accrued liabilities, income tax payable etc. are _________ under indirect method.
Not treated
Added
Subtracted
None of these
SOLUTION
Solution : B
Increase in current liabilities like accounts payable, accrued liabilities, income tax payable etc. are added under indirect method.
Question 4
It’s one of the purest measures of cash sources and uses.
Operating Activities
Investing Activities
Financing Activities
None of these
SOLUTION
Solution : A
Operating Activities is one of the purest measures of cash sources and uses.
Question 5
Purchase of machinery by means of issue of shares should be
Included
Excluded
Subtracted
None of these
SOLUTION
Solution : B
Purchase of machinery by means of issue of shares should be excluded from cash flow statement as it doesnot involve cash.
Question 6
Which of the following is incorrect about the statement of cash flows?
It provides information about the cash receipt and cash payments of an enterprise.
It reconciles ending cash balance with the balance as per bank statement.
It provides information about the operating, investing and financing activities
None of these
SOLUTION
Solution : B
It reconciles ending cash balance with the balance as per bank statement is incorrect about the statement of cash flows
Question 7
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 at bank
Investment in shares
Cash equivalents
None of these
SOLUTION
Solution : 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 8
Receipt of interest is to be _________ from net profit.
added
deducted
not to be treated
none of these
SOLUTION
Solution : B
Receipt of interest is to be deducted from net profit.
Question 9
Under indirect method of preparing statement of cash flows, depreciation expense affects:
Operating activities
Investing activities
Financing activities
None of these
SOLUTION
Solution : A
Under indirect method of preparing statement of cash flows, depreciation expense affects operating activities.
Question 10
In particular, which cash flow can uncover a company's true profitability?
Operating
Investing
Financing
None of these
SOLUTION
Solution : A
In particular, operating cash flow can uncover a company's true profitability