Question

Match the items of the following two lists:

List-I	List-II
(i) Statement of changes in Working Capital	(a) Cash Flow Statement
(ii) Deferred Tax	(b) Fixed Assets
(iii) Three activities	(c) Funds Flow Statement
(iv) Impairment Loss	(d) Balance Sheet

• A. (i) - (a), (ii) - (b), (iii) - (c), (iv) - (d)
• B. (i) - (c), (ii) - (d), (iii) - (b), (iv) - (a)
• C. (i) - (c), (ii) - (d), (iii) - (a), (iv) - (b)
• D. (i) - (d), (ii) - (c), (iii) - (a), (iv) - (b)

Answer 1

Answer: (C)

(i) - (c), (ii) - (d), (iii) - (a), (iv) - (b)

1) Statement of changes in working capital: The change in working capital may also be verified by calculating working capital separately. While preparing a funds flow "Statement of changes in working capital" is prepared.

2) Deferred tax: An asset on a company's balance sheet that may be used to reduce any subsequent period's income tax expenses.

3) Three Activities: Cash flow statement consist of three activities Operating, Investing, Financing.

4) Impairment loss: It is the decrease in an asset's net carrying value that exceeds the future undisclosed cash flow it should generate. Net carrying value is an asset's acquisition cost minus depreciation.