Question : If a machine whose original cost is Rs.40,000 having accumulated depreciation Rs.12,000, were sold for Rs.34,000 then while preparing Cash Flow Statement its effect on cash flow will be :
Option 1: Cash flow from financing activities Rs.34,000
Option 2: Cash flow from financing activities Rs.6,000
Option 3: Cash flow from investing activities Rs.34,000
Option 4: Cash flow from investing activities Rs.6,000
Correct Answer: Cash flow from investing activities Rs.34,000
Solution : Rs.34000 will be shown as cash flow from investing activities because it generates cash flow in the business from the sale of assets.
Hence the correct answer is option 3.
Question : Sold machinery of original cost Rs. 2,00,000 with an accumulated depreciation of Rs. 1,60,000 for Rs. 60,000. Cash flow from investing activities is
Option 1: Rs 60,000
Option 2: Used in investing activities Rs 60,000
Option 3: Rs 20,000
Option 4: None of the above
Question : If 6% Pref. share capital of Rs. 2,00,000 were redeemed at a premium of 5%, while preparing Cash Flow Statement its effect on cash flow will be :
Option 1: Cash used from financing activities Rs.2,12,000
Option 2: Cash received from financing activities Rs.2,12,000
Option 3: Cash used (Payment) from financial activities Rs.2,10,000
Option 4: Cash used (Payment) from financial activities 2,00,000
Question : The cash flow statement begins with :
Option 1: Cash Flow from Operating Activities
Option 2: Cash Flow from Financing Activities
Option 3: Cash Flow from Investing Activities
Question : Under which type of activity will you classify 'Proceeds from Sale of Goodwill while preparing a Cash Flow Statement?
Option 1: Operating activities
Option 2: Investing activities
Option 3: Financing activities
Option 4: Cash and cash equivalents
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