MCQOPTIONS
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MCQOPTIONS
This section includes 233 Mcqs, each offering curated multiple-choice questions to sharpen your Bachelor of Business Administration (BBA) knowledge and support exam preparation. Choose a topic below to get started.
| 101. |
Funds flow statement is a substitute for… |
| A. | income statement |
| B. | balance sheet |
| C. | both |
| D. | none |
| Answer» E. | |
| 102. |
The sources of side of funds flow statement shows the______ sources of funds of a firm. |
| A. | internal |
| B. | external |
| C. | both |
| D. | none |
| Answer» D. none | |
| 103. |
Basically, the funds flow statement shows the causes for changes of _________ during a period. |
| A. | assets |
| B. | liabilities |
| C. | both |
| D. | none |
| Answer» D. none | |
| 104. |
Which of following are original statements? |
| A. | funds flow statement |
| B. | financial statement |
| C. | cash flow statement |
| D. | working capital statement |
| Answer» C. cash flow statement | |
| 105. |
Who uses the funds flow statement widely? |
| A. | financial institutions |
| B. | financial managers |
| C. | analysts |
| D. | all of the above |
| Answer» E. | |
| 106. |
Basically, the funds flow statement is considered a tool for… |
| A. | cost control |
| B. | financial analysis |
| C. | performance analysis |
| D. | none |
| Answer» C. performance analysis | |
| 107. |
The funds flow analysis is of primary importance to… |
| A. | personnel management |
| B. | financial management |
| C. | quality control management |
| D. | auditing |
| Answer» C. quality control management | |
| 108. |
The term non-current account refers to… |
| A. | capital |
| B. | liabilities |
| C. | long term liabilities |
| D. | both (a) & (c) |
| Answer» E. | |
| 109. |
Share premium, share forfeited, profit and loss account, balance of profit are the examples of… |
| A. | current assets |
| B. | permanent liabilities |
| C. | fixed assets |
| D. | current liabilities |
| Answer» C. fixed assets | |
| 110. |
The term current account refers to…. |
| A. | current assets |
| B. | current liabilities |
| C. | both |
| D. | none |
| Answer» D. none | |
| 111. |
Transaction between_________ may cause the flow of funds. |
| A. | current assets and fixed assets |
| B. | current assets and long term liabilities, and capital |
| C. | current liabilities and fixed assets |
| D. | all of the above |
| Answer» E. | |
| 112. |
The term flow of funds refers to… |
| A. | change in funds |
| B. | change in working capital |
| C. | both |
| D. | none |
| Answer» D. none | |
| 113. |
Which of the following is the component of current assets? |
| A. | stock |
| B. | prepaid expenses |
| C. | income earned but not received |
| D. | all of the above |
| Answer» E. | |
| 114. |
Funds means… |
| A. | money |
| B. | cash |
| C. | machinery |
| D. | any form of financial resources |
| Answer» E. | |
| 115. |
Fund flow statement is based on the concept of… |
| A. | business entity |
| B. | accounting period |
| C. | going concern |
| D. | all of the above |
| Answer» D. all of the above | |
| 116. |
The statement which shows the periodical increase or decrease of funds is called___________ statement. |
| A. | funds flow |
| B. | cash flow |
| C. | income |
| D. | working capital |
| Answer» B. cash flow | |
| 117. |
Income statement of a business shows… |
| A. | net profit |
| B. | net operating result of specified period |
| C. | net loss |
| D. | none of these |
| Answer» C. net loss | |
| 118. |
State whether cash deposited in bank will be classified under which kind of activity? |
| A. | cash flow from operating activities |
| B. | cash flow from investing activities |
| C. | cash flow from financing activities |
| D. | no cash flow |
| Answer» E. | |
| 119. |
A company has to prepare its balance sheet once in.. |
| A. | six months |
| B. | two years |
| C. | a year |
| D. | as and when it needs |
| Answer» D. as and when it needs | |
| 120. |
How will you treat payment of ‘Interest on Debentures’ while preparing a Cash Flow Statement? |
| A. | cash flow from operating activities |
| B. | cash flow from investing activities |
| C. | cash flow from financing activities |
| D. | cash equivalent |
| Answer» D. cash equivalent | |
| 121. |
Where will you show purchase of Goodwill in a Cash Flow Statement? |
| A. | cash flow from operating activities |
| B. | cash flow from investing activities |
| C. | cash flow from financing activities |
| D. | cash equivalent |
| Answer» C. cash flow from financing activities | |
| 122. |
How will you treat Bank Overdraft in a Cash Flow Statement? |
| A. | cash flow from operating activities ’ |
| B. | cash flow from investing activities |
| C. | cash flow from financing activities |
| D. | cash equivalent |
| Answer» D. cash equivalent | |
| 123. |
A Ltd., engaged in the business of retailing of two wheelers, invested ₹50,00,000 in the shares of a manufacturing company. Dividend received on this investment will be : |
| A. | cash flow from operating activities |
| B. | cash flow from investing activities |
| C. | cash flow from financing activities |
| D. | cash equivalent |
| Answer» C. cash flow from financing activities | |
| 124. |
How will you deal increase in the balance of ‘Securities Premium Reserve’ while preparing a Cash Flow Statement? |
| A. | cash flow from operating activities |
| B. | cash flow from investing activities |
| C. | cash flow from financing activities |
| D. | cash equivalent |
| Answer» D. cash equivalent | |
| 125. |
If 6% Pref. share capital ₹2,00,000 were redeemed at a premium of 5%, while preparing Cash Flow Statement its effect on cash flow will be : |
| A. | cash used from financing activities ₹2,12,000 |
| B. | cash received from financing activities ₹2,12,000 |
| C. | cash used (payment) from financial activities ₹2,10,000 |
| D. | cash used (payment) from financial activities ₹2,00,000 |
| Answer» D. cash used (payment) from financial activities ₹2,00,000 | |
| 126. |
If the amount of goodwill is ₹40,000 at the beginning of a year and ₹48,000 at the end of that year then while preparing cash flow statement its effect on cash flow will be : |
| A. | cash used (payment) in investing activities ₹8,000 |
| B. | cash received from operating activities ₹8,000 |
| C. | cash used (payment) from operating activities ₹8,000 |
| D. | cash used (payment) from financial activities ₹8,000 |
| Answer» B. cash received from operating activities ₹8,000 | |
| 127. |
Which of the following is not application of cash? |
| A. | increase in debtors |
| B. | increase in inventory |
| C. | increase in bills payable |
| D. | increase in prepaid expenses |
| Answer» D. increase in prepaid expenses | |
| 128. |
Which of the following is not source of cash? |
| A. | issue of shares |
| B. | purchase of machinery |
| C. | sale of asset |
| D. | dividend received |
| Answer» C. sale of asset | |
| 129. |
Which of the following is source of cash? |
| A. | cash deposited into bank |
| B. | cash withdrawn from bank |
| C. | sale of goods costing ₹10,000 for ₹8,000 |
| D. | sale of marketable securities for cash |
| Answer» D. sale of marketable securities for cash | |
| 130. |
Cash flow statement is prepared for financial planning of |
| A. | long range |
| B. | medium range |
| C. | short range |
| D. | very long range |
| Answer» D. very long range | |
| 131. |
Which of the following is not a cash outflow? |
| A. | increase in prepaid expenses |
| B. | increase in debtors |
| C. | increase in stock |
| D. | increase in creditors |
| Answer» E. | |
| 132. |
Which of the following statements are false? |
| A. | old furniture written off doesn’t affect cash flow. |
| B. | cash flow statement is a substitute for cash account. |
| C. | appropriation of retained earnings is not shown in cash flow statement. |
| D. | net cash flow during a period can never be negative. |
| Answer» C. appropriation of retained earnings is not shown in cash flow statement. | |
| 133. |
When a fixed asset is bought as hire purchase, interest element is classified under ______ and loan element is classified under________. |
| A. | operating activities, financing activities |
| B. | financing activities, investing activities |
| C. | investing activities, operating activities |
| D. | none of the above |
| Answer» C. investing activities, operating activities | |
| 134. |
In case of other enterprises cash flow arising from interest paid should be classified as cash flow from ________ while dividends and interest received should be stated as cash flow from ____. |
| A. | operating activities, financing activities |
| B. | financing activities, investing activities |
| C. | investing activities, operating activities |
| D. | none of the above |
| Answer» C. investing activities, operating activities | |
| 135. |
Cash Flow Statement is based upon |
| A. | cash basis of accounting |
| B. | accrual basis of accounting |
| C. | credit basis of accounting |
| D. | none of the above |
| Answer» B. accrual basis of accounting | |
| 136. |
Cash Flow Statement is also known as |
| A. | statement of changes in financial position on cash basis |
| B. | statement accounting for variation in cash |
| C. | both a and b |
| D. | none of the above. |
| Answer» D. none of the above. | |
| 137. |
As per Accounting Standard-3, Cash Flow is classified into |
| A. | operating activities and investing activities |
| B. | investing activities and financing activities |
| C. | operating activities and financing activities |
| D. | operating activities, financing activities and investing activities |
| Answer» E. | |
| 138. |
Which item comes under financial activities in cash flow? |
| A. | redemption of preference share |
| B. | issue of preference share |
| C. | interest paid |
| D. | all the above |
| Answer» E. | |
| 139. |
The objectives of Cash Flow Statement are |
| A. | analysis of cash position |
| B. | short-term cash planning |
| C. | evaluation of liquidity |
| D. | comparison of operating performance |
| Answer» E. | |
| 140. |
Cash flow example from an operating activity is |
| A. | purchase of own debenture |
| B. | sale of fixed assets |
| C. | interest paid on term-deposits by a bank |
| D. | issue of equity share capital |
| Answer» D. issue of equity share capital | |
| 141. |
Cash flow example from an investing activity is |
| A. | issue of debenture |
| B. | repayment of long-term loan |
| C. | purchase of raw materials for cash |
| D. | sale of investment by non-financial enterprise |
| Answer» E. | |
| 142. |
Cash flow example from a financing activity is |
| A. | payment of dividends |
| B. | receipt of dividend on investment |
| C. | cash received from customers |
| D. | purchase of fixed asset |
| Answer» B. receipt of dividend on investment | |
| 143. |
The basic financial statements include |
| A. | statement of cash flows |
| B. | income statement |
| C. | balance sheet |
| D. | all of the above |
| Answer» E. | |
| 144. |
The purchase value of assets over its serviceable life is categorised as |
| A. | appreciated liabilities |
| B. | appreciated assets |
| C. | depreciation |
| D. | appreciation |
| Answer» D. appreciation | |
| 145. |
A firm that issues stocks and bonds to raise funds results in |
| A. | decreases cash |
| B. | increases cash |
| C. | increases equity |
| D. | indian overseas bank |
| Answer» C. increases equity | |
| 146. |
In cash flows, when a firm invests in fixed assets and short-term financial investments results in |
| A. | increased equity |
| B. | increased liabilities |
| C. | decreased cash |
| D. | increased cash |
| Answer» D. increased cash | |
| 147. |
Statement of cash flows includes |
| A. | financing activities |
| B. | operating activities |
| C. | investing activities |
| D. | all of the above |
| Answer» E. | |
| 148. |
Quick ratio is 1.8:1, current ratio is 2.7:1 and current liabilities are Rs 60,000. Determine value of stock. |
| A. | rs 54,000 |
| B. | rs 60,000 |
| C. | rs 1, 62,000 |
| D. | none of the above |
| Answer» B. rs 60,000 | |
| 149. |
Which of the following statements are true? |
| A. | debt to equity and debt to asset ratios measure capital structure and vary widely among industries. |
| B. | debt utilization ratios alone do not measure a firm\s ability to meet its cash obligations. |
| C. | dupont analysis considers the impact of debt on the profitability of the firm. |
| D. | two of the above are true. |
| Answer» E. | |
| 150. |
The ________ ratios help determines the degree of financial risk and earnings volatility present in a firm. |
| A. | profitability |
| B. | asset utilization |
| C. | liquidity |
| D. | none of the above. |
| Answer» E. | |