Cash Flow Statement MCQs:
1. Statement of cash flows includes
A) Financing Activities
B) Operating Activities
C) Investing Activities
D) All of the Above
Answer: D
2. In cash flows, when a company invests in fixed assets and short-term financial investments results in
A) Increased Equity
B) Increased Liabilities
C) Decreased Cash
D) Increased Cash
Answer: C
3. A company that issues stocks and bonds to raise funds results in
A) Decrease in Cash
B) Increase in Cash
C) Increase in Equity
D) Increase in Liabilities
Answer: B
4. The purchase value of assets over its serviceable life is categorised as
A) Appreciated Liabilities
B) Appreciated Assets
C) Depreciation
D) Appreciation
Answer: C
5. The basic financial statements include
A) Statement of Cash Flows
B) Statement of Retained Earnings
C) Balance Sheet and Income Statement
D) All of the Above
Answer: D
6. The statement of cash flow clarifies cash flows according to
A) Operating and Non-operating Flows
B) Inflow and Outflow
C) Investing and Non-operating Flows
D) Operating, Investing, and Financing Activities
Answer: D
7. Cash flow example from a financing activity is
A) Payment of Dividends
B) Receipt of Dividend on Investment
C) Cash Received from Customers
D) Purchase of Fixed Asset
Answer: A
8. Cash flow example from an investing activity is
A) Issue of Debenture
B) Repayment of Long-term Loan
C) Purchase of Raw Materials for Cash
D) Sale of Investment by Non-Financial Enterprise
Answer: D
9. Cash flow example from an operating activity is
A) Purchase of Own Debenture
B) Sale of Fixed Assets
C) Interest Paid on Term-deposits by a Bank
D) Issue of Equity Share Capital
Answer: C
10. Which item comes under financial activities in cash flow?
A) Redemption of Preference Share
B) Issue of Preference Share
C) Interest Paid
D) All the above
Answer: D
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