CBSE Class 12th Accountancy Chapter 4 - Cash Flow Statement Important Questions with Answers

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‘Payment of dividend and interest’ will be classified as which type of activity while preparing cash flow statement? (All India 2019, 2011)
Or
While preparing cash flow statement, ‘receipt of interest and dividend’ will be classified under which type of activity in case of a non-financial enterprise? (All India 2019)
Or
‘Payment and receipt of interest and dividend’ is classified as which type of activity while preparing cash flow statement? (Delhi 2017)

Question 2.

What is meant by ‘cash flow’? (All India 2019, 2014: Delhi 2019, 2014, 2011)
Or
State the meaning of ‘cash flow’ while preparing cash flow statement. (All India 2014)

Question 3.

When can ‘receipt of dividend’ be classified as an operating activity? State. Also give reason in support of your answer. (All India 2019)

Question 4.

Mevo Ltd a financial enterprise had advanced a loan of ? 3,00,000, invested ? 6,00,000 in shares of the other companies and purchased machinery for ? 9,00,000. It received divided of ? 70,000 on investment in shares. The company sold an old machine of the book value of ? 79,000 at a loss of ? 10,000. Compute cash flows investing activities. (Dehli 2019)

Question 5.

Are ‘assets acquired by issue of shares disclosed in the cash flow statement? Give reason in support of your answer. (All India 2019)

Question 6.

K Ltd a manufacturing company obtained a loan of ? 6,00,000, advanced a loan of ? 1,00,000 and purchased machinery for ? 5,00,000. Calculate the amount of cash flow from financing and investing activities. (Delhi 2019)

Question 7.

Under which type of activity will you classify cash advances and loans made to third party while preparing cash flow statement? (All India 2019; Comportment 2018)

Question 8.

State the primary objective of preparing a cash flow statement. (All India 2019,2017: CBSE 2018: Comportment 2018)

Question 9.

What is meant by ‘cash and cash equivalents’? (All India 2019)
Or
Give the meaning of ‘cash equivalents’ for the purpose of preparing cash flow statement. (Delhi 2016)
Or
What is meant by ‘cash equivalents’? (All India 2014,2011: Delhi (C) 2014)

Question 10.

What is meant by ‘inflow of cash’? (All India 2019)

Question 1.

How is goodwill written-off treated while calculating cash flow from operating activities? (All India 2019)

Question 2.

When does an investment qualify as cash equivalent? (All India 2019)

Question 3.

‘Interest received and paid’ is considered as which type of activity by a finance company while preparing a cash flow statement? (CBSE 2018)

Question 4.

While preparing cash flow statement, the accountant of a financing company showed ‘dividend received ? 50,000 on investments’ as an investing activity. Was he correct in doing so? Give reason. (All India 2018)
Or
While preparing the ‘Cash Flow Statement’ the accountant of Gulfam Ltd, a financing company showed ‘dividend received on investment’ as ‘investing activity. Was he correct in doing so? Give reason. Delhi 2016

Question 5.

Normally, what should be the maturity period for a short-term investment from the date of its acquisition to be qualified as cash equivalents? (All India 2017)

Question 6.

Will ‘net decrease in working capital’ other than cash and cash equivalents, increase, decrease or not change cash flow from operating activities? Give reason in support of your answer. (Delhi: All Indio 2017)

Question 7.

Will ‘acquisition of machinery by issue of equity shares’ be considered while preparing ‘cash flow statement’? Give reason in support of your answer. (All India 2017)

Question 8.

State whether the following will increase, decrease or have no effect on cash flow from operating activities while preparing ‘cash flow statement’.
(i) Decrease in outstanding employees benefits expenses by ? 3,000.
(ii) Increase in prepaid insurance by ? 2,000. (All India 2017)