Question 1

Which of the following is included in the operating activities section of a cash flow statement?

Accepted Answer

Net income

Answer

Long-term investments

Answer

Issuing of shares

Answer

Principal repayments

Question 2

Which of the following represents a financing activity in a cash flow statement?

Accepted Answer

Repayment of long-term debt

Answer

Purchase of inventory

Answer

Payment of operating expenses

Answer

Sale of property, plant, and equipment

Question 3

Which of the following is included in the investing activities section of a cash flow statement?

Accepted Answer

Purchase of property, plant, and equipment

Answer

Collection of accounts receivable

Answer

Payment of interest expense

Answer

Payment of salaries to employees

Question 4

Which of the following is a cash outflow in the financing activities section of a cash flow statement?

Accepted Answer

Payment of dividends

Answer

Purchase of inventory

Answer

Receipt of interest income

Answer

Payment of operating expenses

Question 5

Which section of the cash flow statement includes cash flows from the issuance of shares?

Accepted Answer

Financing activities

Answer

Operating activities

Answer

Investing activities

Answer

Operating and investing activities

Question 6

Which of the following is considered an example of an operating activity in a cash flow statement?

Accepted Answer

Payment of wages to employees

Answer

Sale of long-term investment

Answer

Payment of dividends to shareholders

Answer

Purchase of land for future development

Question 7

Which section of the cash flow statement includes cash flows from the sale of equipment?

Accepted Answer

Investing activities

Answer

Financing activities

Answer

Operating activities

Answer

Operating and financing activities

Question 8

Which section of the cash flow statement includes cash flows from the repayment of a bank loan?

Accepted Answer

Financing activities

Answer

Operating activities

Answer

Investing activities

Answer

Operating and investing activities

Question 9

Which of the following is a key component of the cash flow statement?

Accepted Answer

Operating cash flow

Answer

Net profit margin

Answer

Revenue growth

Answer

Return on investment

Question 10

Which section of the cash flow statement includes cash flows from the purchase of inventory?

Accepted Answer

Operating activities

Answer

Operating and financing activities

Answer

Financing activities

Answer

Investing activities

Question 11

Which of the following is an example of a non-operating activity in the cash flow statement?

Accepted Answer

Gains from the sale of an investment

Answer

Payment of utility bills

Answer

Purchase of raw materials

Answer

Payment of taxes

Question 12

Which of the following will result in a decrease in cash flow from operating activities?

Accepted Answer

Increase in accounts payable

Answer

Increase in prepaid expenses

Answer

Increase in accounts receivable

Answer

Increase in inventory

Question 13

Which of the following is included in the cash flow statement under operating activities?

Accepted Answer

Interest received from loans

Answer

Issuance of long-term debt

Answer

Dividends paid to shareholders

Answer

Purchase of office furniture

Question 14

Which of the following is an example of a cash outflow in operating activities?

Accepted Answer

Payment of rent expenses

Answer

Interest paid on loans

Answer

Receipt of customer payments

Answer

Proceeds from the sale of equipment

Question 15

Which of the following is a common adjustment made in the cash flow statement for operating activities?

Accepted Answer

Depreciation expense

Answer

Dividend payments

Answer

Interest income

Answer

Gain from the sale of land

Question 16

Which of the following is an example of an indirect method adjustment in the cash flow statement for operating activities?

Accepted Answer

Adjustment for changes in accounts receivable

Answer

Payment of income taxes

Answer

Purchase of inventory

Answer

Investment in long-term bonds

Question 17

Which of the following transactions is an example of financing activities in the cash flow statement?

Accepted Answer

Issuing bonds to raise capital

Answer

Obtaining a bank loan to expand operations

Answer

Purchasing inventory for resale

Answer

Paying wages to employees

Question 18

Which of the following is an example of a financing activity in the cash flow statement?

Accepted Answer

Paying dividends to shareholders

Answer

Paying salaries to employees

Answer

Collecting cash from sales

Answer

Purchasing equipment for production

Question 19

Which of the following transactions is considered a financing activity in the cash flow statement?

Accepted Answer

Issuing preferrence share

Answer

Purchasing inventory for resale

Answer

Paying salaries to employees

Answer

Receiving cash from sales

Question 20

Which of the following is an example of a cash flow from investing activities?

Accepted Answer

Purchasing new equipment

Answer

Receiving cash from customers

Answer

Hiring new employees

Answer

Obtaining a loan from a bank

Question 21

Which of the following is NOT an example of a cash flow from investing activities?

Accepted Answer

Paying dividends to shareholders

Answer

Purchasing additional shares of stock in another company

Answer

Selling investments in other companies

Answer

Acquiring a subsidiary company

Question 22

Which of the following is a common cash flow from investing activities?

Accepted Answer

Sale of property, plant, and equipment

Answer

Payment of salaries and wages

Answer

Collection of accounts receivable

Answer

Issuance of long-term debt

Question 23

While calculating operating profit, which will be added to net profit?

Accepted Answer

Increase in General Reserve

Answer

Profit on Sale of Asset

Answer

Interest Received

Answer

Refund of Tax

Question 24

While calculating cash flow from operating activities, which will be added?

Accepted Answer

Increase in Creditors

Answer

Increase in Debtors

Answer

Decrease in Bills Payable

Answer

Increase in Stock

Question 25

How will you treat payment of ‘Interest of Debentures’ while preparing a Cash Flow Statement?

Accepted Answer

Cash Flow from Financing Activities

Answer

Cash Equivalents

Answer

Cash Flow from Investing Activities

Answer

Cash Flow from Operating Activities

Question 26

Accepted Answer

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