# MCQ Questions Chapter 6 Cash Flow Statement Class 12 Accountancy

Please refer to MCQ Questions Chapter 6 Cash Flow Statement Class 12 Accountancy with answers provided below. These multiple-choice questions have been developed based on the latest NCERT book for class 12 Accountancy issued for the current academic year. We have provided MCQ Questions for Class 12 Accountancy for all chapters on our website. Students should learn the objective based questions for Chapter 6 Cash Flow Statement in Class 12 Accountancy provided below to get more marks in exams.

## Chapter 6 Cash Flow Statement MCQ Questions

Please refer to the following Chapter 6 Cash Flow Statement MCQ Questions Class 12 Accountancy with solutions for all important topics in the chapter.

MCQ Questions Answers for Chapter 6 Cash Flow Statement Class 12 Accountancy

Question: From the following particulars, what will be the amount of provision for tax made during the year?
Provision for Taxation
31.3.2011 50,000
31.3.2012 40,000
The Company paid taxes Rs 45,000 for the year 2011-2012.
(a) Rs 45,000
(b) Rs 35,000
(c) Rs 40,000
(d) Rs 50,000

B

Question: Total sales Rs. 200000, Debtors at the beginning Rs. 15000, Debtors at the ending Rs. 28000, Cash Sale will be
(a) Rs. 187000
(b) Rs 213000
(c) Rs. 215000
(d) Rs. 210000

A

Question: Which of the following is an example of non cash Exp
(a) Wages and salaries
(b) Telephone Exp
(c) Depreciation
(d) All of the options

C

Question: If the net profits earned during the year is Rs. 50,000 and the amount of debtors in the beginning and the end of the year is Rs. 10,000 and Rs.20,000 respectively, then the cash from operating activities will be equal to Rs.
(a) Rs. 60,000
(b) Rs. 70,000
(c) Rs. 40,000
(d) Rs. 50000

C

Question: Net Profit for the year Rs. 15000 , Interest Received in advance on 1st Jan 2004 Rs. 2000 and 31st December 2004 Rs. 3000, Cash from operation will be
(a) Rs. 16000
(b) Rs. 22000
(c) Rs, 13000
(d) Rs. 15000

A

Question: If the net operating profit of a business is Rs. 90000 and the debtors have decreased during the year by Rs. 30000, cash from operation equal to
(a) Rs. 90000
(b) Rs. 60000
(c) Rs. 50000
(d) Rs. 120000

D

Question: Cash from operation will increase due to
(a) Decrease in stock
(b) Increase in stock
(c) Increase in Bills receivable
(d) Decrease in Bills receivable

A

Question: Cash flow statement is prepared from
(a) All of the options
(b) Balance sheet
(c) Profit and Loss

A

Question: Cash from operation will decrease due to
(a) Decrease in Current assets
(b) Increase in Current assets
(c) Increase in Current Liabilities
(d) Decrease in Current Liabilities

B

Question: An example of Cash Flows from Investing Activity is :
(a) Cash Revenue from Operations
(c) Payment of cash for purchase of fixed assets
(d) Dividend paid

C

Question: An Example of cash flow from financing activity is :
(a) Payment of dividend
(b) Receipt of dividend on investment
(c) Cash received from customer
(d) Purchase of fixed asset

A

Question: Increase in the amount of bills receivable results in
(a) Decrease in cash
(b) Increase in cash
(c) No change in cash
(d) All of the options

A

Question: Which of the following is not a cash outflow
(a) Increase in Prepaid Exp.
(b) Increase in Stock
(c) Increase in outstanding Exp.
(d) Increase in Bills receivable

C

Question: According to AS-3 (Revise(d) redemption of preference share is _______ activity
(a) Financing
(b) Investing
(c) Operating
(d) All of the options Answer: Financing

A

Question: Marketable securities is treated as ___________ in cash flow statement
(a) Cash equivalent
(b) Non Cash equivalent
(c) Both
(d) All of the options

A

Question: An example of cash flow from 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.

D

Question: A company receives a dividend of X2 Lakhs on its investment in other company’s shares. In case of a Finance Company, it will be classified under which kind of activity?
(a) Cash Flow from Operating Activities
(b) Cash Flow from Investing Activities
(c) Cash Flow from Financing Activities
(d) No Cash Flow

A

Question: How will you classify loans given by Tata Finance Company?
(a) Cash Flow from Investing Activities
(b) Cash Flow from Financing Activities
(c) No Cash Flow
(d) Cash Flow from Operating Activities

D

Question: How will you classify deposits by customers in Axis Bank?
(a) Cash Flow from Operating Activities
(b) Cash Flow from Investing Activities
(c) Cash Flow from Financing Activities
(d) No Cash Flow

A

Question: Which of the following is not a cash inflow
(a) Purchase of fixed assets
(b) Sale of goods
(c) Issue of debentures
(d) Sales of fixed assets

A

Question: Acquisition of assets or Acquisition of an enterprise by means of issue of shares and debentures is _________ transaction
(a) Non Cash
(b) Cash
(c) Both
(d) None of these

A

Question: Which of the following item is considered as Cash Equivalents?
(a) Debtors
(b) Marketable Securities
(c) Investment
(d) Bills of Exchange

B

Question: Koval Ltd! is a financing company. Under which activity will the amount of interest paid on a loan settled in the current year be shown?
(a) investing Activities
(b) Financing Activities
(c) Both Investing and Financing Activities
(d) Operating Activities

D

Question: Which of the following is considered as Cash Equivalents?
(a) Bank deposits for 2 months
(b) Commercial Papers
(c) Treasury Bills
(d) All of the above

D

Question: Cash deposit with the bank with a maturity date after two months belongs to which of the following in the cash flow statement:
(a) Investing activities
(b) Financing activities
(c) Cash and Cash equivalents
(d) Operating activities

C

Question: Which of the following is not part of Cash and Cash Equivalents?
(a) Inventories
(b) Current investments
(c) Short-term Deposits
(d) Marketable Securities

A

Question: GSC Ltd. purchased machinery of Rs. 10,00,000 issuing a cheque of Rs. 2,50,000 and 10% Debentures of Rs. 7,50,000. ln the Cash Flow Statement, the transaction will be shown as.
(a) Outflow under Investing Activity Rs. 10,00,000, inflow under Financing Activity as Receipt for Debentures Rs. ,50,000.
(b) Outflow under investing Activity Rs. 2,50,000.
(c) Inflow of Rs. 7,50,000 as Financing Activity.
(d) None of the above.

B

Question: Angel Ltd., a stock broker, purchased 5,000 shares of Tata Housing Ltd. it is
(a) Operating Activity.
(b) Investing Activity.
(c) Financing Activity.
(d) General Activity.

B

Question: Which of the following is shown under Financing Activity?
(a) interest paid
(c) Cash received against sale of goods
(d) Cash paid for purchase of goods.

A

Question: Which of the following is not included in Cash and Cash Equivalents?
(a) Balances with Banks
(b) Bank deposits with 100 days of maturity
(c) Cheques and Drafts on hand
(d) Cash on hand

B

Question: From the following information find out the inflow of cash
31st March, 2015 31st March, 2014
Plant and Machinery Account ` Rs6,00,000 Rs 4,50,000
Accumulated Depreciation ` Rs1,60,000 Rs 1,00,000
Additional Information: Depreciation for the year 2014‐15 is Rs 80,000. During the year Machinery was Purchased
for Rs 2,50,000 and a part of asset was sold at a profit of Rs 40,000.
(a) Rs 1,20,000;
(b) Rs 1,00,000;
(c) Rs 80,000;
(d) Rs40000

A

Question: From the following information find out the cash flow from financing activities.
Liabilities
Proposed Dividend
31st March 2013 20,000
31st March 2014 15,000
Additional Information: Equity Share Capital raised 3,00,000 10% Debentures Redeemed 1,00,000 Preference
Share capital Redeemed 50,000. Interim Dividend paid during the year 20,000
(a) Rs 1,25,000
(b) Rs 1,00,000
(c) Rs1,50,000
(d) Rs 1,30,000

B

Question: Declaration of Final Dividend would result in ___
(a) Outflow in Financing activities.
(b) Outflow in Operating activities.
(c) Inflow in Operating activities.
(d) No Flow of cash.

Question: Interest collected by an automobile company selling a car on instalment basis will be classified as
(a) Investing activity
(b) Operating activity
(c) Financing activity
(d) Cash and cash equivalents

Question: Patents purchased and completely amortized in the year of purchase is added under_____ ________and shownas an outflow under____________

Operating,Investing

Question: From the following information, the outflow of cash for the purchase of machinery will be:
Written down value of machinery as on 1.4.2011 – Rs 5,00,000
Written down value of machinery as on 31.3.2012 -Rs7,00,000
Depreciation on machinery charged during t he year Rs 60,000

Machinery having book value Rs 25,000 sold for Rs 20,000
(a) Rs 2,70,000
(b) Rs 2,80,000
(c) Rs 2,75,000
(d) Rs 2,85,000

D

Question: Which of the following transactions would result inflow of cash:
(a) Cash withdrawn from Bank for office use.
(b) Purchase of machinery worth Rs 2,00,000 and issued shares in consideration thereof.
(c) Sale of furniture for Rs 3,000 to Mr. Mohan.
(d) Cash received from Debtors Rs 6,000

D

Question: From the following information find out the inflow of cashOffice Equipment `
31st March, 2014 60,000
31st March, 2013 1,00,000
Depreciation for the year 2013-14 is Rs 7,000, Purchase of office Equipment during the year Rs 10,000 Part of Office
Equipment sold at a profit of Rs 6,000
(a) Rs 48,000
(b) Rs 49,000
(c) Rs 44,000
(d) Rs 33,000

B

Question: From the following information find the cash generated from operations:
Operating Profit before working capital changes 1,00,000
Depreciation on fixed assets 15,000Loss on sale of Furniture 5,000
Interest paid 13,000
Increase in debtors 8,000
Decrease in stock 7,000
Increase in creditors 4,000
(a) Rs 1,18,000
(b) Rs 1,24,000
(c) Rs 1,03,000
(d) Rs 1,00,000

C

Question: Bank Overdraft and cash credit are to be treated as:
(a) Cash Equivalents
(b) Non Current Liabilities
(c) Investing Activity
(d) Short Term Borrowings

D

Question: Which of the following transactions would not create a cash flow ?
(a) A company purchased some of its own stock from a stockholder
(b) Amortization of a patent
(c) Payment of a Cash Dividend
(d) Sale of equipment at book value

B

Question: From the following information find out the cash outflow cash outflow from financing activities.
Year – I Year – II
Proposed Dividend Rs 1,20,000 1,50,000
12% Debentures Rs 4,00,000 5,00,000
Additional Information: Additional Debentures were issued at the end of year.
Interim Dividend paid 50,000.
Preference Share capital issued Rs 2,00,000.
(a) Rs 82,000
(b) Rs 2,08,000
(c) Rs 2,38,000
(d) Rs 2,48000

Question: Which of the following transactions would result in neither cash inflow nor outflow of cash and cash equivalents.
(a) Issue of share capital
(b) Issue of bonus shares
(c) redemption of debentures
(d) Trade recievable realized.

B

Question: A decrease in outstanding expense would result in
(a) Decrease in cash balance
(b) Increase in cash balance
(a) Unaltered
(d) Would change the current liabilities.

D

Question: Pick the odd one out
(a) Long term borrowings
(b) Reserves and surplus
(c) Share capital
(d) Public deposits.

B

Question: Expenses paid in advance at the end of the year are i…….in ……ii activities while preparing cash flow statement
(b) Subtracted,Operating
(d) Subtracted,Investing

A

Question: Gain on sale of tangible non current asset is an
(a) Operating activity
(b) Investing activity
(c) Financing activity
(d) Cash and Cash Equivalents

A

Question: Dividend received by Atal Pharma Limited will be a i.)………………………for the organization .and will be
classifies as ii.)…………………activity.
(a) Inflow,investing
(b) Inflow,financing
(c) Outflow ,financing
(d) Inflow,Operating

Question: Which of the following shall be considered as an outflow of cash in cash flow statement.
(a) Decrease in Public Deposits
(b) Issue of share capital
(c) Increase in accounts payable
(d) Decrease in accounts receivables.

A

Fill in the Blanks:

Question: Debentures issued for consideration other than cash are not shown in the Cash Flow Statement because
——-_is not received against the issue.

Cash-

Question: Loss on issue of debentures written off is shown by way of deduction from of___

Facevalue thedebentures.

Question: Purchase of securities by a non- finance company is __________

Investin

Question: The basis of Cash Flow Statement is __________________

Cash Basis

Question: Patents purchased and completely amortized in the year of purchase is added under_____ ________and shown as an outflow under____________

Operating,Investing

Question: Issue of Shares and Debentures is a ____________

Activity. Financing

Question: Amount transferred to General Reserve will be affecting __________ activity of Cash Flow
Statement.

Operating

Question: Interest received Rs 10,000 by a Non-financial company is an __________ activity

Investing

Question: Redemption of Debentures results in outflow under _______

Activity. Financing

Question: Purchase of Goodwill is shown as outflow under ___________ Activities.

Investing

Question: Dividend paid by a Non-financial company is a __________ Activity.

Financial

Question: Shares issued to promoters in consideration of their services are shown as a financing activity

False

Question: Buy Back of shares is an extraordinary item for Financing activity

True

Question: Gratuity paid to a retiring employee is an Operating activity.

True

Question: Issue of Bonus shares is shown as a financing activity.

False

Question: Underwriting Commission paid on issue of shares increases outflow under Financing Activities.

True

Question: Operating activities are principal revenue producing activities of an enterprise and those activities that are notinvesting or financing activities.

True

Question: Redemptions of debenture at a premium is inflow under Financing Activity.

False

Question: Interest received on investment is financing activity.

False

Question: Purchase of land increases owner’s wealth.

False

Question: Interest received on debenture by a manufacturing enterprises shown as Investing Activity

True

Question: Goodwill 1st April, 201831st March, 2019Rs. 10,000 Rs. 8,000
Goodwill amortized during the year is Rs. 2,000.

True

Question: Purchase of software by a manufacturing concern is Operating Activity.

False

Question: Asset of Rs.10,000 sold during the year at a profit of Rs. 2,000. Rs. 12,000 is shown asinflow under investing Activity.

True

Question: Rs. 10,000 paid for redemption of debenture is outflow under Financing Activity.