Question : Where will you show purchase of intangible assets in a Cash Flow Statement?
Option 1: Shown as outflow under 'Cash flows from investing activities'.
Option 2: Shown as outflow under 'Cash flows from operating activities'.
Option 3: Shown as inflow under 'Cash flows from investing activities'.
Option 4: None of the above
Correct Answer: Shown as outflow under 'Cash flows from investing activities'.
Solution : Answer = Shown as outflow under 'Cash flows from investing activities'.
The purchase of intangible assets would be shown as an outflow under "Cash flows from investing activities" in the Cash Flow Statement because it represents an investment in assets that are not physical in nature and are expected to generate future economic benefits. Hence, the correct option is 1.
Question : Payment of dividend in a Cash flow statement is
Option 1: Payment of dividend will be shown as outflow under 'Cash flows from financing activities'.
Option 2: Payment of dividend will be shown as inflow under 'Cash flows from financing activities'.
Option 3: Payment of dividend will be shown as outflow under 'Cash flows from investing activities'.
Question : The Patents of X Ltd. increased from Rs.6,00,000 in 2013-14 to Rs.7,00,000 in 2014-15. what will be its treatment while preparing Cash Flow Statement for the year ended 31st March 2015?
Option 1: Purchase of Patents of Rs.50,000 and will be shown under Cash Flow from Investing Activities as an outflow of cash.
Option 2: Purchase of Patents of Rs.1,00,000 and will be shown under Cash Flow from Investing Activities as an outflow of cash.
Option 3: Purchase of Patents of Rs.1,50,000 and will be shown under Cash Flow from Investing Activities as an outflow of cash.
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