Question 1

Which among the following do not result in the flow of fund&#10;A)depreciation of fixed assets&#10;B)goodwill written off&#10;C)transfer to general reserve&#10;D)all of these

Accepted Answer

Depreciation of fixed assets, goodwill written off, and transfer to general reserve are non-cash expenses or allocations. They do not involve any actual movement of cash or funds, hence they do not result in the flow of funds.

Question 2

Fund flow refers to changes in ------------- capital&#10;A)fixed&#10;B)working&#10;C)both of these&#10;D)none of these

Accepted Answer

Fund flow refers to changes in working capital, indicating the movement of funds into and out of a business, affecting its liquidity.

Question 3

Net profit earned plus non working capital expenses is equal to &#8230;&#8230;&#8230;&#8230;..&#10;A)fund provided by operations&#10;B)use of funds&#10;C)sinking fund&#10;D)none of these

Accepted Answer

Net profit earned plus non-operating expenses (not non-working capital expenses) is equal to funds provided by operations. This calculation is used in finance to assess the cash generated by a company's business operations.

Question 4

&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.refers to firms investment in current assets.&#10;A)working capital&#10;B)gross working capital&#10;C)net working capital&#10;D)all of these

Accepted Answer

Gross working capital refers to a firm's investment in current assets.

Question 5

&#8230;&#8230;&#8230;&#8230;&#8230;..means excess of current assets over current liabilities.&#10;A)working capital&#10;B)gross working capital&#10;C)net working capital&#10;D)all of these

Accepted Answer

Net working capital specifically refers to the excess of current assets over current liabilities, indicating the liquidity position of a company to meet its short-term obligations.

Question 6

&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.means cash and other assets which are expected to be sold or consumed during the normal operating cycle of business.&#10;A)liquid assets&#10;B)quick assets&#10;C)cash equivalents&#10;D)current assets

Accepted Answer

Current assets are cash and other assets that are expected to be sold or consumed within a business's normal operating cycle, typically within one year.

Question 7

Which among the following asset is excluded from current assets ?&#10;A)loose tools&#10;B)accounts receivable&#10;C)short term investments with bank&#10;D)finished goods

Accepted Answer

Loose tools are typically classified as fixed assets rather than current assets because they are not expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer. Current assets include items like accounts receivable, short-term investments, and inventory (including finished goods), which are expected to be liquidated or turned into cash within a short period.

Question 8

Which transaction results in flow of funds ?&#10;A)transaction involve only fixed assets&#10;B)transaction involve only current assets&#10;C)all of these&#10;D)none of these

Accepted Answer

The answer of Which transaction results in flow of funds...

Question 9

There will be flow of funds, if a transaction involves&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..&#10;A)current assets and fixed assets&#10;B)current assets and capital&#10;C)current assets and fixed liabilities&#10;D)all of these

Accepted Answer

A flow of funds occurs when there is a change in the financial position, which can happen with transactions involving current assets, fixed assets, capital, and fixed liabilities.

Question 10

The flow of funds occurs when a transaction changes on the one hand a non current account and on the other hand a &#8230;&#8230;&#8230;&#8230;..&#10;A)current asset&#10;B)current liability&#10;C)a or b&#10;D)none of these

Accepted Answer

The flow of funds occurs when a transaction changes a non-current account on one side and either a current asset or a current liability on the other side, hence both A and B are correct.

Question 11

&#8230;&#8230;&#8230;&#8230;&#8230;.assets are those which in the ordinary course of business can be converted into cash within a short period of time.&#10;A)current&#10;B)non current&#10;C)both of these&#10;D)none of these

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;&#8230;.assets are those which in the ordinary...

Question 12

&#8230;&#8230;&#8230;..liabilities are those which are intended to be paid in the ordinary course of business within a short period.&#10;A)current&#10;B)non current&#10;C)both of these&#10;D)none of these

Accepted Answer

The answer of &#8230;&#8230;&#8230;..liabilities are those which are intended to...

Question 13

Goods purchased for cash. This transaction involves&#8230;&#8230;&#8230;&#8230;..&#10;A)flow of fund&#10;B)no flow of fund&#10;C)both of these&#10;D)none of these

Accepted Answer

The answer of Goods purchased for cash. This transaction involves&#8230;&#8230;&#8230;&#8230;..&#10;A)flow...

Question 14

Which among the following transaction involves no flow of fund ?&#10;A)redemption of debentures&#10;B)purchase of fixed assets&#10;C)issue of debentures for cash&#10;D)conversion of debentures into shares.

Accepted Answer

The answer of Which among the following transaction involves no...

Question 15

Which among the following transaction involves flow of fund ?&#10;A)cash paid to creditors&#10;B)payment of bills payable&#10;C)raising of short term loans&#10;D)raising of long term loans

Accepted Answer

The answer of Which among the following transaction involves flow...

Question 16

While preparing &#8230;&#8230;&#8230;&#8230;&#8230;statement, both capital and revenue items are considered.&#10;A)fund flow statement&#10;B)income statement&#10;C)both of these&#10;D)none of these

Accepted Answer

The answer of While preparing &#8230;&#8230;&#8230;&#8230;&#8230;statement, both capital and revenue...

Question 17

&#8230;&#8230;&#8230;&#8230;&#8230;..is a tool of management for financial analysis and helps in making decisions.&#10;A)fund flow statement&#10;B)balance sheet&#10;C)income statement&#10;D)none of these

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;&#8230;..is a tool of management for financial...

Question 18

&#8230;&#8230;&#8230;&#8230;statement shows changes in financial position and hence dynamic in nature&#10;A)fund flow statement&#10;B)balance sheet&#10;C)income statement&#10;D)none of these

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;statement shows changes in financial position and...

Question 19

Increase in Accounts payable when compared to previous year results in &#8230;&#8230;&#8230;&#8230;&#8230;.of working capital&#10;A)increase&#10;B)decrease&#10;C)no change&#10;D)none of these

Accepted Answer

The answer of Increase in Accounts payable when compared to...

Question 20

Decrease in Working capital constitutes &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)source of fund&#10;B)application of funds&#10;C)neither source nor application&#10;D)none of these

Accepted Answer

The answer of Decrease in Working capital constitutes &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)source of...

Question 21

&#8230;&#8230;&#8230;&#8230;&#8230;.is the dividend paid to the members of a company during a financial year before the finalization of annual accounts.&#10;A)bonus&#10;B)final dividend&#10;C)interim dividend&#10;D)none of these

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;&#8230;.is the dividend paid to the members...

Question 22

Fund lost in operations represent&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..&#10;A)inflow of funds&#10;B)outflow of funds&#10;C)neither inflow nor outflow&#10;D)none of these

Accepted Answer

The answer of Fund lost in operations represent&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..&#10;A)inflow of funds&#10;B)outflow...

Question 23

Which of the following results in Increase of working capital ?&#10;A)increase in current assets&#10;B)decrease in current assets&#10;C)increase in current liabilities&#10;D)all of these

Accepted Answer

The answer of Which of the following results in Increase...

Question 24

Which among the following results in decrease of working capital ?&#10;A)increase in current liabilities&#10;B)increase in current assets&#10;C)decrease in current liabilities&#10;D)none of these

Accepted Answer

The answer of Which among the following results in decrease...

Question 25

According to SEBI requirements Cash flow statement is prepared by categorizing cash flows into operating, investing and &#8230;&#8230;&#8230;&#8230;..activities&#10;A)financing&#10;B)routine&#10;C)long term&#10;D)none of these

Accepted Answer

The answer of According to SEBI requirements Cash flow statement...

Deck 3: Fund Flow and Working Capital