A cash flow statement is a financial statement that presents total data concerning complete cash inflows a business gains from its continuing progress and external financing sources, as well as all cash outflows that pay for trading activities and finances during a delivered time. Show In other words, a cash flow statement is a financial statement that estimates the cash produced or used by a firm in a presented time. Financial Statements includes, (1) Profit and Loss Account, (2) Balance sheet, (3) Cash Flow statement and (4) Notes to Accounts. Given below are important MCQs on Cash Flow Statement to analyse your understanding of the topic. The answers are also given for your reference. 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 Stay tuned to BYJU’S for more MCQs on Economics, question papers, sample papers, syllabus and Commerce notifications. Chapter 7: Funds Analysis, Cash Flow Analysis, and Financial PlanningJust click on the button next to each answer and you'll get immediate feedback.Note: Your browser must support JavaScript in order to use this quiz. 1.According to the accounting profession, which of the following would be considered a cash-flow item from an "investing" activity?cash inflow from interest income. cash inflow from dividend income. cash outflow to acquire fixed assets. all of the above. 2.According to the Financial Accounting Standards Board (FASB), which of the following is a cash flow from a "financing" activity?cash outflow to the government for taxes. cash outflow to shareholders as dividends. cash outflow to lenders as interest. cash outflow to purchase bonds issued by another company. 3.If the following are balance sheet changes: $5,005 decrease in accounts receivable $7,000 decrease in cash $12,012 decrease in notes payable $10,001 increase in accounts payable a "use" of funds would be the:$7,000 decrease in cash. $5,005 decrease in accounts receivable. $10,001 increase in accounts payable. $12,012 decrease in notes payable. 4.On an accounting statement of cash flows an "increase(decrease) in cash and cash equivalents" appears asa cash flow from operating activities. a cash flow from investing activities. a cash flow from financing activities. none of the above. 5.Uses of funds include a (an):decrease in cash. increase in any liability. increase in fixed assets. tax refund. 6.Which of the following would be included in a cash budget?depreciation charges. dividends. goodwill. patent amortization. 7.An examination of the sources and uses of funds statement is part of:a forecasting technique. a funds flow analysis. a ratio analysis. calculations for preparing the balance sheet. 8.Which of the following is NOT a cash outflow for the firm?depreciation. dividends. interest payments. taxes. 9.Which of the following would be considered a use of funds?a decrease in accounts receivable. a decrease in cash. an increase in account payable. an increase in cash. 10.The cash flow statement in the United States is most likely to appear usinga "supplementary method." a "direct method." an "indirect method." a "flow of funds method." 11.For a profitable firm, total sources of funds will always total uses of funds.be equal to be greater than be less than have no consistent relationship to  Multiple-Choice Quiz questions are Copyright © by Pearson Education Limited. 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Which of the following is considered as cash flows from operating activities?
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