Cash Flow Statement

Questions Bank

  • Cash Flows are inflows and outflows of cash and cash equivalent which imply movement of cash in and out non-cash items.
    2018-02-12 15:48:23
  • AS 3 states cash comprises cash in hand and demand deposits with banks, and cash equivalents means short term highly liquid investment that are readily convertible into amount.
    2018-02-12 15:48:02
  • Operating Activities are the principal revenue producing activities of the enterprise and other activities that are not investing or financing activities.
    2018-02-12 15:47:44
  • AS 3 Investing Activities are the activities related to acquisition and disposal of long term assets and other investments not included in the cash equivalents.
    2018-02-12 15:47:30
  • Separate Disclosure of cash flows from investing activities is important so that it could show the extent to which investments have been made for resources intended to generate the future income and cash flows.
    2018-02-12 15:47:13
  • Financing Activities are the activities which result in change in the size and compsition of the owner's capital and borrowing of enterprise from other sources.
    2018-02-12 15:47:02
  • Separate Disclosure of cash flows arising from financing activities is important and it is useful in predicting claims on future cash flows by provider of funds.
    2018-02-12 15:46:47
  • Limitation of Cash Flow Statement are (i) Non-Cash Transactions Ignored, (ii) Historical in Nature, (iii) Misleading result based on wrong data, (iv) Mere Duplicity of Work.
    2018-02-12 15:46:34

  • 2018-02-12 15:45:53

Questions Bank -

Ans. The statement showing inflows and outflows of cash and cash equivalents during a year is termed as cash flow statement

Ans. AS 3 (Revised), cash means Cash-in-Hand and Demand Deposits with banks.

Ans. AS 3 (Revised) is the accounting standard which governs the preparation of cash flow statement.

Ans. The two item included in cash equivalent are:
(i) Cheques and drafts on hand.
(ii) Earmarked balances with banks.

Ans. Cash inflow means receipt of cash from a non-cash item by the enterprise during the period.

Ans. The two example of cash inflow are:
(i) Sale of fixed assets
(ii) Issue of securities (equity shares)

Ans. Cash outflow means payment of cash in respect of a non cash item by the enterprise during the period of time.

Ans. The two examples of cash outflow are
(i) Purchase of any fixed asset for cash.
(ii) Payment of any expense.

Ans. Operating Activities refer to revenue generating activities of a business firm. They result from the transactions and other events that enter into the determination of Net Profit or Loss.

Ans. The two cash inflow from operating activities are.
(i) Cash revenue from operations,
(ii) Collection from trade receivables.

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