Classifying Items of Financial Statements

Q.

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

Q.

The opening balance of bank is shown in which side of the bank account?

1. Credit side

2. Debit side

3. No impact

4. None of these

Q.

Interest received on investment can be classified as ___________.

1. Operating Activities

2. Not a cashflow

3. Investing Activities

4. Financing Activities

Q.

Redemption of preference shares can be classified as ___________.

1. Operating Activities

2. Investing Activities

3. Financing Activities

4. Not a cashflow

Q.

Which of the following is incorrect about the statement of cash flows?

1. None of these

2. It provides information about the cash receipt and cash payments of an enterprise.

3. It reconciles ending cash balance with the balance as per bank statement.

4. It provides information about the operating, investing and financing activities

Q.

Payment of income tax can be classified as ___________.

1. Operating Activities

2. Financing Activities

3. Not a cashflow

4. Investing Activities

Q. Payment of income tax is a cash outflow from activity.

1. income
2. investing
3. financing
4. operating

Q.

Example of cash flow from financing activity is :

1. Payment of dividend

2. Receipt of dividend on investment

3. Purchase of fixed Asset

4. Cash received from customer

Q.

An example of cash flow from operating activity for financing company:

1. Purchase of own debenture

2. Sale of fixed assets

3. Issue of equity share capital

4. Interest paid on long term deposits by a bank

Q.

Purchase of machinery can be classified as ___________.

1. Operating Activities

2. Investing Activities

3. Financing Activities

4. Not a cashflow

Q.

What is money multiplier? How will you determine its value? What ratios play an important role in the determination of the value of the money multiplier?

Q.

Following is the information given in respect of certain items of a Sports Club. Show these items in the Income and Expenditure Account and the Balance Sheet of the Club:

Particulars	Rs
Sports Fund as on 1.4.2005	35, 000
Sports Fund Investments	35, 000
Interest on Sports Fund	4, 000
Donations for Sports Fund	15, 000
Sports Prizes awarded	10, 000
Expenses on Sports Events	4, 000
General Fund	80, 000
General Fund Investments	80, 000
Interest on General Fund Investments	8, 000

Q.

Payment of dividend can be classified as ___________.

1. Not a cashflow

2. Operating Activities

3. Investing Activities

4. Financing Activities

Q. Interest received on debentures held as an investment is a cash inflow from activity.

1. operating
2. investing
3. financing
4. payment

Q.

Define Nominal Flow.

Q.

Issue of debentures can be classified as ___________.

1. Operating Activities

2. Investing Activities

3. Financing Activities

4. Not a cashflow

Q. Name the major heads under which the following items will be presented in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013:

(i) Loose Tool.	(ii) Unpaid Dividend.
(iii) Copyrights and Patents.	(iv) Land and Building.

Q.

Receipt of dividend can be classified as ___________.

1. Investing Activities

2. Financing Activities

3. Operating Activities

4. Not a cashflow

Q.

Which of the following is not a financing activity:

1. Issuance of common stock

2. Issuance of bonds payable

3. Sale of investment

4. Purchase of treasury stock

Q.

In cash flow statement, the item of interest is shown in …..

1. Operating activities and financing activities

2. Operating activities, financing activities and investing activities

3. Operating activities and investing activities

4. Investing activities and financing activities

Q.

In the case of financial enterprises, the cash flow resulting from interest paid should be classified as cash flow from ..............

1. Operating activities

2. Financing activities

3. Investing activities

4. None of these

Q.

Following is the Balance Sheet of Raj Oil Mills Limited as at March 31, 2017. Calculate Current Ratio.

Particulars	(Rs)
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share capital	7, 90, 000
b) Reserves and surplus	35, 000
2. Current Liabilities
a) Trade Payables	72, 000
Total	8, 97, 000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets	7, 53, 000
2. Current Assets
a) Inventories	55, 800
b) Trade Receivables	28, 800
c) Cash and cash equivalents	59, 400
Total	8, 97, 000

Q. Cash purchase of goods is a cash outflow from activity.

1. operating
2. investing
3. financing
4. income

Q.

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

Q.

Sale of fixed assets can be classified as ___________.

1. Investing Activities

2. Financing Activities

3. Not a cashflow

4. Operating Activities

Q.

Issue of preference shares can be classified as ___________.

1. Operating Activities

2. Investing Activities

3. Financing Activities

4. Not a cashflow

Q.

When MU is positive, what happens to TU?

1. It decreases

2. It becomes the highest

3. It remains constant

4. It increases

Q.

For non-financing company, the payment of interest is a/an _______

1. Financing activities

2. None of these

3. Operating activities

4. Investing activities

Q.

How do debt and equity differ in the costs and risks involved? Explain.

Q. How many ways are there to prepare Bank Reconciliation Statement?

1. Three
2. One
3. Two
4. Five