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Question
Why is ‘Cash Flow statement’ prepared? State.
Solution
Cash Flow Statement is prepared to ascertain gross inflows and outflows of cash and cash equivalents from business activities of operating, investing and financing.
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RELATED QUESTIONS
'An enterprise may hold securities and loans for dealing or trading purposes in which case they are similar to inventory acquired specifically for resale.' Is the statement true? Cash flows from such activities will be classified under which type of activity while preparing 'Cash flow statement'.
State the primary objective of preparing a Cash Flow Statement.
While preparing Cash Flow Statement, the accountant of 'Rachana Ltd.', a financing company, included 'Interest received on loan' in financing activities. Was the correct in doing so? Give reason.
Which of the following transactions will result in the flow of cash?
(1) Deposited Rs 40,000 into the bank.
(2) Withdrew cash from bank Rs 54,000.
(3) Sold marketable securities of Rs 25,000 at par.
(4) The sold machinery of the book value of Rs 50,000 at a gain of Rs 10,000
Which of the following transactions will result in the flow of cash?
State any two advantages of preparing cash flow statement.
State the purpose of preparing a ‘Cash Flow Statement’.
Short Answer Question
What are the objectives of preparing cash flow statement?
Long Answer Question
Explain the major Cash Inflows and outflows from financing activities.
From the information given below you are required to calculate the cash paid for the inventory:
|
Particulars |
(Rs) |
|
Inventory in the beginning |
40,000 |
|
Credit Purchases |
1,60,000 |
|
Inventory in the end |
38,000 |
|
Trade payables in the beginning |
14,000 |
|
Trade payables in the end |
14,500 |
"______ implies movement of cash in and out of non-cash items. Receipt of cash from a non-cash item is termed as cash inflow while cash payment in respect of such items as cash outflow"
Classify the following activity into operating activities, investing activities, financing activities or cash activities
"Proceeds from sales of old machinery"
Classify the following activity into operating activities, investing activities, financing activities or cash activities
"Interest and Dividend received": In case of a financial enterprise (whose main business is lending and borrowing)
What is the primary objective of cash flow statement?
Which of the following transactions will not result into flow of cash?
Cash Flow Statement is based upon ______.
An example of Cash Flows from Operating Activity is ______
Which of the following is not an investing cash flow?
Interest collected by an automobile company selling a car on an instalment basis will be classified as:
