Quiz  /  Cash Flow Class 12 MCQ Questions With Answers

  • 1. 
    Ideally, the net cash flow should be

  • positive
  • negative

  • 2. 
    What is Income?

  • Money that goes
  • Money that flow
  • Money that you bring in
  • All of above

  • 3. 
    What is another word for Wealth?

  • Rich
  • Net Worth
  • Wealthy
  • All of above

  • 4. 
    Money received from a business investor would be an example of

  • cash inflow
  • cash outflow

  • 5. 
    Which are examples of expenses?

  • Rent/Mortgage
  • Car Insurance
  • Credit Card debt
  • All of above

  • 6. 
    Property owned by a person or company, regarded as having value is an __________

  • asset
  • liability
  • net worth
  • pizza

  • 7. 
    Shows the total change in cash from operating, investing, and financing activities

  • Beginning Cash Balance
  • Net Cash Flows
  • Ending Cash Balance
  • All of above

  • 8. 
    What is an Asset?

  • debts you owe
  • anything you borrow
  • anything you own that has value
  • None of these

  • 9. 
    The amount of cash moving into and out of a business

  • Cash Flow
  • Net Worth

  • 10. 
    What is a Liability ?

  • anything you own that has value
  • debts you owe
  • something you borrow
  • None of these

  • 11. 
    Which of these is NOT a goal of the cash flow forecast?

  • Start up a business
  • Run an existing business
  • Be 100% accurate
  • Keep the bank informed

  • 12. 
    How is it called when a Business runs out of cash?

  • Inflow
  • Insolvency
  • Insufficiency
  • Inaccuracy

  • 13. 
    What means "cash flow as a liquid asset"?

  • That it assess a company's profitability.
  • That is immediately available for spending on goods and services.
  • That it includes all purchases of capital assets and investments in other business ventures.
  • That it represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

  • 14. 
    Why is the cash flow forecast important?

  • To know if the business is holding too much cash that could be used in a more profitable way.
  • To know how much money ask the bank for.
  • To help the manger to know the available cash to pay/purchase.
  • All the above.

  • 15. 
    Which one of the following ISN’T a way of cash outflow?

  • Purchasing goods & services
  • Paying wages, salaries and expenses
  • Paying creditors
  • Borrowing money from external sources

  • 16. 
    The following would appear in which section of the cash flow statement?cash payments for equipment

  • Operating
  • Investing
  • Financing

  • 17. 
    Which of these ISN’T a way of holding working capital?

  • Cash
  • A company car
  • Debtors
  • Inventories

  • 18. 
    While calculating Operating Net Profit which of the following is added to Net profit ____

  • Refund of Tax
  • Dividend received
  • Transfer to General Reserve
  • Gain on sale of assets

  • 19. 
    Shows the movement of cash during a specific time frame that has already occured

  • cash flow statement
  • cash flow projection

  • 20. 
    Cash deposited into bank will result in ____ of cash

  • Inflow
  • Outflow
  • No flow
  • All

  • 21. 
    The term _________ describes how efficiently an asset can be converted intocash.

  • Liquidity
  • Solvency
  • Conversion rate
  • Working capital cycle

  • 22. 
    Assume a firm sells goods costing £40,000 for £55,000. It provides the customerwith 70% trade credit (i.e. the customer pays only 30% of the price as a downpayment). The profit earned is __________, and the cash received is _________.

  • £15,000, £12,000
  • £15,000, £16,500
  • £15,000, £28,000
  • £15,000, £55,000

  • 23. 
    Which of the following statements are false?A) Cash Flow Statement is helpful in the formation of policies.B) Cash Flow Statement is useful for external analysisC) Cash Flow Statement is helpful in estimating future cash flow

  • Both A and B
  • Both A and C
  • Both B and C
  • None of the above

  • 24. 
    Which one is the working capital formula?

  • Working capital = cash received - cash spent.
  • Working capital = current assets - current liabilities.
  • Working capital = operating cash flow - capital expenditures.
  • All of above

  • 25. 
    Cash Flow Statement is based upon

  • Cash basis of accounting
  • Accrual basis of accounting
  • Credit basis of accounting
  • None of the above

  • 26. 
    While preparing a cash flow statement business activities are classified into ?

  • 03 categories
  • 06 categories
  • 04 categories
  • 02 categories

  • 27. 
    Selling an asset would be an example of

  • cash inflow
  • cash outflow

  • 28. 
    Which accounting standard is applicable while preparing a cash flow statement ?

  • AS-4
  • AS-3
  • AS-3(Revised)
  • Schedule  III
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