Question : Which of the following is not a limitation of the Cash Flow Statement?

Option 1: Not suitable for judging the Liquidity

Option 2: Possibility of Window-dressing

Option 3: It ignores non-cash transactions

Option 4: Useful to Outsiders

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 about the statement of cash flow is not correct?

Option 1: Cash flow statement is part of financial statement

Option 2: Cash flow statement is prepared on cash basis of accounts

Option 3: Cash flow statement is substitute of cash account

Option 4: Cash flow reports are generally prepared at the end of the accounting year

Question : Which of the following statements is incorrect?

Option 1: Ignores the Qualitative Elements is a limitation of Financial Statement Analysis

Option 2: Not free from personal bias is  a limitation of Financial Statement Analysis

Option 3: Ignores the price level changes is a limitation of Financial Statement Analysis

Option 4: None of the above