1) Which of following is not true

Select one:
a. Private companies do not need to disclose cash flow statement to public
b. Cash flow statement is a compulsory statement to be disclosed by public companies
c.Cash flow statement is an optional statement for the public companies
d.Annual report of public companies are required to disclose Balance sheet, income statement and
cash flow statement
2)Depreciation expense is added to net income, because it decreases net income
but doesn't consume a cash flow (in context of calculation of operating cash flows).
Select one:
True
False
Under the indirect method, depreciation expense is added to net income, because
it decreases net income but doesn't consume a cash flow
3)When a company sells equipment for cash at a loss, cash flows from investing activities decreases
Select one:
True
False
False - Investing cash flows increase by the selling price of the equipment.
4) Paid up capital is:
Select one:
a.The amount the company has requested shareholders to pay
b.The total amount that the company can raise from primary markets during its life
c.The amount unpaid by shareholders
d.The amount that company has received from shareholders

5)The financing section of the statement of cash flows reports

Select one:
a.The cash used to purchase investments for business
b.The cash effects of borrowing, repaying debt, issuing stock, repurchasing stock, and paying
dividends
c.The amount of cash made available by recording depreciation expense for the year
d.The amount of cash used to increase operating assets or long-term investments
6)The amortized amount of an intangible asset is:
Select one:

a.An expense for the business

b.A loss for the business
c.An asset for the business
d.An income for business

7) Cash in context of cash flow statement refers to

Select one:
a.marketable securities
b.All of these
c.Demand deposits
d.Cash in hand
8)Which of the following does not impact the calculation of price of bonds
Select one:
a.Coupon rate
b.Share price
c.Face value of bond
d.Discount rate used in present value calculation
9)Amortization of a patent reduces cash flows from investing activities.
Select one:
True
False
False - Patent amortization is a noncash expense and therefore doesn't affect cash
flows.
10)Which of following is true
Select one:
a.Equity shareholders have primary claim on the profits earned by business
b.Debt holders have voting rights in the decision making of firm
c.Interest on debt has to be paid no matter company makes profits or losses
d.Equity shareholders need to be paid dividend each year
11)Which of the following is not a type of dividend
Select one:
a.Stock split
b.Cash dividend
c.Stock dividend
d.None of these

12) Which of following is false

Select one:
a.Profit on sale of asset increases reported profit for business
b.Interest on investments is a cash flow from investing activities
c.Amortization of preliminary expenses reduces cash flows of business
d.Dividend is paid after tax is deducted out of profit
13) Which of the following is true?
Select one:
a.Amortization is the process of spreading the cost of assets over their useful life
b.Amortization increases the book value of an intangible asset
c.Amortization is an intangible asset
d.Amortization is the process of spreading the market value (that changes every year) of intangible
assets over its useful life

14)Which activity do the 'increase in the balance in a retailer's Inventory' belong to (in context of
Cash flow statement).
Select one:
a.Financing
b.Investing
c.Operating
d.Supplemental
15)Which of following is correct
Select one:
a.Depreciation does not save any tax for the business
b.We record all assets at market value in the balance sheet
c.Choice of depreciation method should aim at increasing the tax shield for the business
d.Accumulated depreciation is a liability for business and you owe this amount to creditors
16)Which of following is incorrect
Select one:
a.In written down value method of depreciation, depreciation charged goes down every year
b.In written down value method scrap value is taken into account while calculating depreciation on
fixed asset
c.In straight line depreciation method, scrap value of asset is not taken into account
d.In straight line depreciation method, depreciation is spread equally across life of project
17)Which of the following is the correct timeline for following:
Select one:

a.Prospectus issue, share application, share allotment, dividend

b.Share application, prospectus issue, share allotment, dividend
c.Share allotment, share application, prospectus issue, dividend
d.Prospectus issue, share allotment, share application, dividend

18)Which of following is incorrect

Select one:
a.Accumulated depreciation is normally shown on liabilities side of balance sheet
b.Accumulated depreciation is a loss for the business
c.Accumulated depreciation account represents total depreciation charged on fixed assets till date
d.Accumulated depreciation account is a contra-asset account

19)Which activity do the 'increase in Bonds issued' belong to (in context of Cash flow statement).
Select one:
a.Operating
b.Investing
c.Financing
d.Supplemental
20) Which of the following is the correct timeline for following:
Select one:
a.Share allotment, share application, prospectus issue, dividend
b.Share application, prospectus issue, share allotment, dividend
c.Prospectus issue, share application, share allotment, dividend
d.Prospectus issue, share allotment, share application, dividend
21) Which of the following does not impact the calculation of price of bonds
Select one:
a.Face value of bond
b.Coupon rate
c.Discount rate used in present value calculation
d.Share price
22) Which activity do the 'proceeds from the sale of equipment' belong to (in context of cash flow
statement)?
Select one:
a. Operating
b. Supplemental
c. Investing

d.Financing

23)Depreciation expense is added to net income, because it decreases net income

but doesn't consume a cash flow (in context of calculation of operating cash flows).
Select one:
True
False

24)The statement of cash flows is divided into three main categories. These categories are
Select one:
a.
Operating, investing, and financing
b. Operating, investing, and cash collections
c.
Cash outflows, cash inflows, and noncash activities
d.
Operating, marketing, and investing

25) An increase in accounts receivable during the year will be added to net income (in context of
calculation of operating cash flows)
Select one:
True
False
False - Under the indirect method, an increase in accounts receivable during the
year will be deducted from net income, because sales were greater than cash
collections.
26) When a company purchases equipment for which it issues common stock as
price consideration, the equipment purchase is reported as a cash flow due to
financing activity.
Select one:
True
False
False - Purchasing equipment using common stock doesn't involve a cash flow and
is therefore not reported within the investing or financing section of the cash flow
statement.