Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 15 Cash Flow Statement. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Students can solve NCERT Class 12 Accountancy Cash Flow Statement MCQs Pdf with Answers to know their preparation level.
Cash Flow Statement Class 12 Accountancy MCQs Pdf
Multiple Choice Questions
Select the Best Alternate :
1. Cash flow statement is prepared for financial planning of
(A) Long range
(B) Medium range
(C) Short range
(D) Very Long range
Answer
Answer: C
2. Which of the following is source of cash?
(A) Cash deposited into Bank
(B) Cash withdrawn from Bank
(C) Sale of Goods costing ₹10,000 for ₹8,000
(D) Sale of marketable securities for cash
Answer
Answer: C
3. Which of the following is not source of cash?
(A) Issue of shares
( B) Purchase of Machinery
(C) Sale of Asset
(D) Dividend received
Answer
Answer: B
4. Which of the following is not application of cash?
(A) Increase in Debtors
(B) Increase in Inventory
(C) Increase in Bills Payable
(D) Increase in Prepaid Expenses
Answer
Answer: C
5. Cash from operating activities consists of:
(A) Operating Profit
(B) Decrease/Increase in Current Assets
(C) Decrease/Increase in Current Assets
(D) All of the Above
Answer
Answer: D
6. While calculating operating profit which will be added to net profit:
(A) Preliminary Expenses Written off
(B) Depreciation
(C) Loss on Sale of Asset
(D) All of the Above
Answer
Answer: D
7. While calculating operating profit which will be added to net profit
(A) Profit on Sale of Asset
(B) Increase in General Reserves
(C) Interest received
(D) Refund of Tax
Answer
Answer: B
8. While calculating cash flow from operating activities which will be deducted:
(A) Decrease in Prepaid Expenses
(B) Increase in Trade Payables
(C) Increase in Trade Receivables
(D) Decrease in Trade Receivables
Answer
Answer: C
9. While calculating cash flow from operating activities which will be added :
(A) Increase in Inventory
(B) Increase in Creditors
(C) Decrease in Bills Payable
(D) Increase in Trade Receivables
Answer
Answer: B
10. Cash from Operating activities will decrease due to :
(A) Increase in Current Assets
(B) Decrease in Current Liabilities
(C) Neither of the two
(D) Both A and B above
Answer
Answer: D
11. Which of the following is incorrect about the statement of cash flows?
(A) It provides information about the cash receipt and cash payments of an enterprise.
(B) It reconciles ending cash balance with the balance as per bank statement.
(C) It provides information about the operating, investing and financing activities.
(D) It explains the deviation of cash from Earnings.
Answer
Answer: B
12. The statement of cash flows clarifies cash flows according to
(A) Operating and non-operating flows
(B) Investing and non-operating flows
(C) Inflows and outflows
(D) Operating, investing and financing activities
Answer
Answer: D
13. An example of cash flow from operating activity is :
(A) Purchase of own debenture
(B) Sale of fixed assets .
(C) Interest paid on term-deposits by a bank
(D) Issue of equity share capital
Answer
Answer: C
14. An example of Cash Flow from Operating Activity is :
(A) Cash receipts from sale of goods and services
(B) Sale of long-term investments
(C) Interest Received
(D) Issue of Debentures
Answer
Answer: A
15. Which of the following is an example of cash flow from Operating Activities?
(A) Issue of Shares
(B) Purchase of Machinery
(C) Purchase of Investment
(D) Purchase of Inventory for Cash
Answer
Answer: D
16. An example of cash flow from investing activity is :
(A) Issue of debenture
(B) Repayment of long-term loan
(C) Purchase of raw materials for cash
(D) Sale of investment by non-fmancial enterprise.
Answer
Answer: D
17. An example of Cash Flows from Investing Activity is :
(A) Cash Revenue from Operations
(B) Commission Received
(C) Payment of cash for purchase of fixed assets
(D) Dividend paid
Answer
Answer: C
18. An Example of cash flow from financing activity is :
(A) Payment of dividend
(B) Receipt of dividend on investment
(C) Cash received from customer
(D) Purchase of fixed asset
Answer
Answer: A
19. An example of Cash Flows from Financing Activity is :
(A) Credit Revenue from Operations
(B) Cash receipts from issue of shares
(C) Sale of Investments
(D) Interest Received
Answer
Answer: B
20. If a machine whose original cost is ₹40,000 having accumulated depreciation ₹12,000, were sold for ₹34,000 then while preparing Cash Flow Statement its effect on cash flow will be :
(A) Cash flow from financing activities ₹34,000
(B) Cash flow from financing activities ₹6,000
(C) Cash flow from investing activities ₹34,000
(D) Cash flow from investing activities ₹6,000
Answer
Answer: C
21. If 6% Pref. share capital ₹2,00,000 were redeemed at a premium of 5%, while preparing Cash Flow Statement its effect on cash flow will be :
(A) Cash used from financing activities ₹2,12,000
(B) Cash received from financing activities ₹2,12,000
(C) Cash used (Payment) from financial activities ₹2,10,000
(D) Cash used (Payment) from financial activities ₹2,00,000
Answer
Answer: C
22. If the amount of goodwill is ₹40,000 at the beginning of a year and ₹48,000 at the end of that year then while preparing cash flow statement its effect oncash flow will be :
(A) Cash used (Payment) in Investing Activities ₹8,000
(B) Cash received from operating activities ₹8,000
(C) Cash used (Payment) from Operating Activities ₹8,000
(D) Cash used (Payment) from Financial Activities ₹8,000
Answer
Answer: A
23. How will you deal increase in the balance of ‘Securities Premium Reserve’ while preparing a Cash Flow Statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) Cash Equivalent
Answer
Answer: C
24. Fine Garments Ltd. is engaged in the export of readymade garments. The company purchased a machinery of ₹10,00,000 for the use in packaging of such garments. Cash flow due to the purchase of machinery will be cash flow from:
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) Cash Equivalent
Answer
Answer: B
25. A Ltd., engaged in the business of retailing of two wheelers, invested ₹50,00,000 in the shares of a manufacturing company. Dividend received on this investment will be :
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) Cash Equivalent
Answer
Answer: B
26. How will you treat payment of dividend in a Cash flow statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) Cash Equivalent
Answer
Answer: C
27. How will you treat Bank Overdraft in a Cash Flow Statement?
(A) Cash Flow from Operating Activities ’
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) Cash Equivalent
Answer
Answer: C
28. Where will you show purchase of Goodwill in a Cash Flow Statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) Cash Equivalent
Answer
Answer: B
29. How will you treat payment of ‘Interest on Debentures’ while preparing a Cash Flow Statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) Cash Equivalent
Answer
Answer: C
30. Interest received by a finance company is classified under which kind of activity while preparing a Cash flow statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: A
31. State whether cash deposited in bank will be classified under which kind of activity?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: D
32. Mention the net amount of ‘Source’ or ‘Use’ of cash when a fixed asset having book value of ₹15,000 is sold at a loss of ₹5,000.
(A) Use ₹5,000
(B) Source ₹10,000
(C) Use ₹15,000
(D) Source ₹15,000
Answer
Answer: B
33. Dividend paid by a Trading company is classified under which kind of activity while preparing cash flow statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: C
34. A company receives a dividend of ₹2 Lakhs on its investment in other company’s shares. In case of a Finance Company, it will be classified under which kind of activity?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: A
35. How will you classify loans given by Tata Finance Company?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: A
36. How will you classify deposits by customers in Axis Bank?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: A
37. A Mutual Fund Company receives a dividend of ₹20 Lakhs on its investments in another company’s shares. Where will it appear in a Cash Flow Statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: A
38. Dividend paid by a finance company is classified under which kind of activity while preparing cash flow statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: C
39. Dividend paid by a manufacturing company is classified under which kind of activity while preparing cash flow statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: C
40. Interest paid by an investment company will come under which kind of activity while preparing cash flow statement?
(A) Cash Flow from Operating Activities
(B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
(D) No Cash Flow
Answer
Answer: A
41. Which of the following item is not considered as Cash Equivalents?
(A) Short term Deposits in Bank
(B) Commercial Papers
(C) Treasury Bills
(D) Investment
Answer
Answer: D
42. Which of the following item is considered as Cash Equivalents?
(A) Marketable Securities
(B) Debtors
(C) Investment
(D) Bills of Exchange
Answer
Answer: A
43. Which of the following is considered as Cash Equivalents?
(A) Bank deposits for 2 months
(B) Commercial Papers
(C) Treasury Bills
(D) All of the above
Answer
Answer: D
44. Cash deposit with the bank with a maturity date after two months belongs to which of the following in the cash flow statement: (C.B.S.E. Sample Paper, 2015)
(A) Investing activities
(B) Financing activities
(C) Cash and Cash equivalent
(D) Operating activities
Answer
Answer: C
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