Question : Non-cash transactions are ____________while preparing Cash Flow Statement.

Option 1: not considered

Option 2: considered

Option 3: both 1 and 2

Option 4: None of the above

Question : Why non-cash transactions are ignored while preparing a Cash Flow Statement?

Option 1: Because non-cash transactions do not affect Cash

Option 2: Because non-cash transactions affected cash

Option 3: Because non-cash transactions affected financing activities

Option 4: Because non- cash transactions affected investing activities

Question : Why non-cash transactions are ignored while preparing a Cash Flow Statement?

Option 1: Because non-cash transactions do not affect Cash

Option 2: Because non-cash transactions affected cash

Option 3: Because non-cash transactions affected financing activities

Option 4: Because non- cash transactions affected investing activities

Question : Which of the following statements is incorrect?

Option 1: Cash Flow Statement is not a substitute for Income Statement

Option 2: Cash Flow Statement shows only the inflows and outflows of Cash

Option 3: Income Statement shows both cash and non-cash items of revenue nature

Option 4: None of the above

Question : Short-term investments are considered as Cash and Cash Equivalent. Hence, they do not affect cash flows and are therefore not considered while preparing cash flow statements.

Option 1: True

Option 2: False

Option 3: Can't say

Option 4: None of the above