Understanding Financial Statements

Q.

Increase in debtors in the cash flow statement is __________.

1. added
2. deducted
3. multiplied
4. not treated

Q. The decrease in inventories is in the cash flow statement.

1. added
2. deducted
3. multiplied
4. not treated

Q.

Why is depreciation charged on fixed assets?

Q. Closing inventory is while the calculating cost of material consumed.

1. added
2. deducted
3. multiplied
4. not treated

Q. Increase in creditors is in the cash flow statement.

1. added
2. deducted
3. multiplied
4. not treated

Q.

What are the different types of provisions in accounting?

Q.

Credit purchase of machine is entered in purchase journal.

1. True
2. False

Q.

What is the treatment of depreciation in financial statements?

Q.

Is depreciation a debit or credit?

Q.

Is Accounts Payable a debit or credit?

Q.

How to reconcile fixed assets?

Q.

Unrealized gains and losses arising from foreign exchange rates are ___

1. Cash flows from Operating activities

2. Cash flows from Operating activities

3. Cash flows from Financing activities

4. Not cash flows

Q.

Under the direct write-off method of accounting for uncollectible accounts (bad debts), when a specific account is written off:

Q.

How do you convert cash to accrual basis?

Q.

When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under _________ activities.

1. Operating

2. Not a cashflow

3. Investing

4. Financing

Q. Depreciation expense is a/an item.

1. non-operating
2. operating
3. non-classified
4. non-cash

Q.

What is depreciation in accounting? Give an example.

Q. The need for providing depreciation on fixed assets are ________.

1. To ascertain true profit & loss
2. To comply the statutory requirements
3. To ascertain net cash
4. Both A and C

Q. Credit purchase of machine is entered in purchase journal.

1. True
2. False

Q.

What are cash flow operations?

Q. Interest on non-performing asset should be recognized on ____basis.

1. None of these
2. Actually received
3. Accrual
4. Standard

Q.

Dividend income is ________ activity.

1. Inflow

2. Outflow

3. Either inflow or outflow

4. None of these

Q. Inventory holding cost may include ___________________.

1. Material purchase cost
2. Penalty charge for default
3. Interest on loan
4. None of the above

Q. Amount spent for the construction of temporary huts for storing building material while constructing a building is ________________.

1. Capital Expenditure
2. Revenue Expenditure
3. Deferred Revenue Expenditure
4. Prepaid Expenses

Q. Current liabilities do not include _______________.

1. Unclaimed Dividends
2. Sundry Creditors
3. Prepaid Insurance
4. Bank Overdraft

Q. A person who endorses a bill is called an _____________.

1. Endorsee
2. Drawee
3. Drawer
4. Endorser

Q. Credit purchase the value of creditors.

1. increases
2. reduces
3. divides
4. multiplies

Q. account is debited while recording credit sales in books of account.

1. Cash
2. Creditors
3. Debtors
4. Sales

Q. Which of the following is not included in Balance Sheet?

1. Cash
2. Accounts payable
3. Accounts receivable
4. Sales

Q.

Is Depreciation a long-term asset?