MCQ on Class 12 Accountancy Chapter 11 Cash Flow Statement with Answers

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Here you will find NCERT MCQ Questions for Class 12 Accountancy with Answers PDF Free Download based on the important concepts and topics given in the textbook as per CBSE new exam pattern. This may assist you to understand and check your knowledge about the chapters. Students also can take a free test of the Multiple Choice Questions of Class 12 Accountancy. Each question has four options followed by the right answer. These MCQ Questions are selected supported by the newest exam pattern as announced by CBSE.

Q1. Cash from Operating activities will decrease due to :

(A) Increase in Current Assets
(B) Decrease in Current Liabilities
(C) Neither of the two
(D) Both A and B above

(D) Both A and B above

Q2. Which of the following is incorrect about the statement of cash flows?

(A) It provides information about the cash receipt and cash payments of an enterprise.
(B) It reconciles ending cash balance with the balance as per bank statement.
(C) It provides information about the operating, investing and financing activities.
(D) It explains the deviation of cash from Earnings.

(B) It reconciles ending cash balance with the balance as per bank statement.

Q3. The statement of cash flows clarifies cash flows according to

(A) Operating and non-operating flows
(B) Investing and non-operating flows
(C) Inflows and outflows
(D) Operating, investing and financing activities

(D) Operating, investing and financing activities

Q4. An example of cash flow from 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

(C) Interest paid on term-deposits by a bank

Q5. An example of Cash Flow from Operating Activity is :

(A) Cash receipts from sale of goods and services
(B) Sale of long-term investments
(C) Interest Received
(D) Issue of Debentures

(A) Cash receipts from sale of goods and services

Q6. Which of the following is an example of cash flow from Operating Activities?

(A) Issue of Shares
(B) Purchase of Machinery
(C) Purchase of Investment
(D) Purchase of Inventory for Cash

(D) Purchase of Inventory for Cash

Q7. 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-fmancial enterprise.

(D) Sale of investment by non-fmancial enterprise.

Q8. While calculating cash flow from operating netivities which will be deducted ?

(a) Increase in Creditors
(b) Increase in Debtors
(c) Decrease in Debtors
(d) Decrease in Prepaid Expenses

(b) Increase in Debtors

Q9. While calculating cash flow from operating activities, which will be added ?

(a) Increase in Stock
(b) Increase in Creditors
(c) Decrease in Bills Payable
(d) Increase in Debtors

(b) Increase in Creditors

Q10. An example of Cash Flow from Investing Activities :

(a) Cash Sales
(b) Issue of Shares
(c) Payment of cash for purchase of machinery
(d) Payment of Dividend

(c) Payment of cash for purchase of machinery

Q11. An example of Cash Flows from Financing Activity is :

(a) Sale of goods
(b) Sale of Investment
(c) Cash receipts from issue of shares
(d) Interest received

(c) Cash receipts from issue of shares

Q12. How will you treat payment of ‘Interest of Debentures’ while preparing a Cash Flow Statement ?

(a) Cash Flow from Operating Activities
(b) Cash Flow from Investing Activities
(c) Cash Flow from Financing Activities
(d) Cash Equivalents

(c) Cash Flow from Financing Activities

Q13. Where will you show purchase of goodwill in Cash Flow Statement:

(a) Cash Flow from Operating Activities
(b) Cash Flow from Investing Activities
(c) Cash Flow from Financing Activities
(d) Cash Equivalent

(b) Cash Flow from Investing Activities

Q14. While calculating cash flows from operating profit, which of the following is not considered in the net profit?

(а) Amortisation of goodwill
(b) Writing off bad debts
(c) Writing off depreciation
(d) Interest paid on bank overdraft

(b) Writing off bad debts

Q15. Which of the following statement is incorrect about cash flow statement?

(a) It provides information about cash inflows and cash outflows .
(b) It provides information of flows of cash under three major categories
(c) It reconciles bank balance with the bank balance as per bank statement
(d) It helps in preparing cash budget

(c) It reconciles bank balance with the bank balance as per bank statement

Q16. Which of the following will come under operating activity?

(a) Issue of shares for cash
(b) Interest received on short-term investments
(c) Trading commission received by a manufacturing company
(d) Sale of marketable securities

(c) Trading commission received by a manufacturing company

Q17. Which of the following will not come under anywhere in cash flow statement?

(a) Repayment of borrowings
(b) Issue of bonus shares
(c) Sale of investments
(d) Dividend paid

(b) Issue of bonus shares

Q18. A plant whose original cost was ₹ 40,000, accumulated depreciation provided till the date of sale was ₹ 15,000 was sold at 20% above the book value. Cash flow from operating activities will be

(a) ₹ 48,000
(b) ₹ 30,000
(c) ₹ 18,000
(d) ₹ 25,000

(b) ₹ 30,000

Q19. Where will you show sale and purchase of shares and securities if it relates to revenue generating activity?

(a) Cash flow from investment activities
(b) Cash flows from financing activities
(c) Cash flows from operating activities
(d) Cash and cash equivalents

(c) Cash flows from operating activities

Q20. Which of the following transaction is always shown under financing activities?

(a) Interest received on investments
(b) Interest paid on investments
(c) Dividend paid
(d) Dividend received

(c) Dividend paid

Q21. Investments made by a financial enterprise with the purpose to resell after the expiry of three months will come under which of the following activity?

(a) Investment
(b) Financing
(c) Operating
(d) Cash equivalents

(c) Operating

Use the above-provided NCERT MCQ Questions for Class 12 Accountancy with Answers Pdf free download. We hope the given NCERT MCQ Questions for Class 12 Accountancy PDF Free Download will definitely yield fruitful results. If you have any queries regarding The CBSE Class 12 Accountancy MCQs Multiple Choice Questions with Answers, drop a comment below and we will get back to you soon.

Accountancy MCQ Class 12 Part 1 and Accounts MCQ Class 12 Part 2

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