Questions are given here that are based on examination for practice by the students to prepare for final exams to score high.

1. Decrease in Bank Overdraft is shown under which heading in a Cash Flow Statement?

a) Operating

b) Financing

c) Investing

d) Cash and Cash Equivalent

2. Which of the following transactions would result in inflow of cash:

a) Cash withdrawn from Bank for office use.

b) Purchase of machinery worth ₹ 2,00,000 and issued shares in consideration thereof.

c) Sale of furniture for ₹ 3,000 to Mr. Mohan.

d) Cash received from Debtors ₹ 6,000.

3. CAE Ltd. earned profit of ₹1,00,000 after charging depreciation of ₹20,000 on assets and transfer to General Reserve of ₹30,000. Goodwill amortised was ₹7,000 and gain on sale of machinery was ₹3,000. Additional Information: Changes notes at the end of the year, Trade Receivables- increase ₹3,000, Trade Payables - increase ₹6,000, Prepaid Expenses - increase ₹200 and Outstanding Expenses - decrease ₹2,000. Cash Flow from Operating Activities will be:

a) ₹1,50,000

b) ₹1,54,800

c) ₹1,52,600

d) ₹1,60,200

4. Which of the following equations is correct:

a) Cost of Revenue from Operations = Revenue from Operations + Gross Profit

b) Cost of Revenue from Operations = Opening Inventory Net Purchases + Direct Expenses - Closing Inventory

c) Cost of Revenue from Operations = Opening Inventory + Closing Inventory

d) Cost of Revenue from Operations = Revenue from Operations - Gross Profit

5. Decrease in Bank Overdraft is shown under which heading in a Cash Flow Statement?

a) Operating

b) Financing

c) Investing

d) Cash and Cash Equivalent

6. Which of the following transaction does not result in Inflow or outflow of cash and cash Equivalents?

a) Collection of cash from trade receivables

b) Payment to trade payables

c) Cash received on maturity of marketable securities

d) Payment to employees

7. Read the following information:

31st March 2023               31st March 2024

Equipment (Cost)                                           ₹ 20,00,000                       ₹ 30,00,000

Accumulated Depreciation                           ₹ 4,80,000                         ₹ 5,90,000

During the year equipment worth ₹ 2,00,000 was sold for ₹ 1,10,000. Depreciation charged during the year was ₹ 1,50,000. Determine the amount to be shown under non-cash and non-operating expenses while preparing cash flow statement.

a) ₹ 1,50,000

b) ₹ 2,00,000

c) ₹ 2,40,000

d) ₹ 50,000

8. Assertion - Purchase of Fixed Assets is classified as Investing Activity in case of all enterprises. Reason - Payment of Dividend on shares is classified as Financing Activity in case of all enterprises. In the context of these two statements, which of the following is correct:

a) Assertion is correct but Reason is wrong

b) Both Assertion and Reason are correct, but Reason is not the correct explanation of Assertion

c) Both Assertion and Reason are incorrect

d) Both Assertion and Reason are correct and Reason is the correct explanation of Assertion

9. Which of the following is not correct:

a) Operating Profit = Revenue from Operations - Operating Cost

b) Operating Profit = Net Profit + Non-operating Expenses-Non-Operating Income

c) Operating Profit = Gross Profit Other Operating Expenses + Other Operating Income

d) Operating Profit = Revenue from Operations-Cost of Revenue from Operations

10. For Cash Flow Statement, Bank Overdraft and cash credit are to be treated as:

a) Cash Equivalents

b) Non-Current Liabilities

c) Investing Activity

d) Short Term Borrowings

Class 12 Accountancy MCQs Cash Flow Statement

11. Which of the following transaction does not result in Inflow or outflow of cash and cash Equivalents?

a) Collection of cash from trade receivables

b) Payment to trade payables

c) Cash received on maturity of marketable securities

d) Payment to employees

12. While preparing cash flow statement, will ‘Cash withdrawn from bank’ result into inflow, outflow or no flow of cash? Give reason in support of your answer.

a) Inflow of cash

b) Outflow of cash

c) No Flow of cash

13. Interest received in cash from loans and advance is considered as _____ activity while preparing cash flow statement.

a) Operating activity

b) Investing activity

c) Financing activity

14. While preparing Cash Flow Statement, write the sequence of treatment of following items:

1. Payment of Premium on Redemption of Preference Shares.
2. Transfer to General Reserve
3. Depreciation on Machinery.

a) 2,3,1

b) 1,2,3

c) 2,1,3

d) 3,1,2

15. Statement I - Sale of Marketable Securities will result in no flow of Cash.

Statement II - Debentures issued as collateral security will result in inflow of cash:

a) Both Statements are correct

b) Both Statements are incorrect

c) Statement I is correct and Statement II is incorrect

d) Statement I is incorrect and Statement I is correct

16. What will be the effect of issue of Bonus shares on Cash Flow Statement:

a) No effect

b) Inflow in Financing Activity

c) Inflow in Operating activity

d) Inflow in Investing Activity

17. CTE Ltd. provides you that there’s 10% Bank Loan, on 31.3.2024 - Nil and on 31.3.2023 - ₹1,00,000. Additional Information: Equity Share Capital raised during the year ₹3,00,000. 10% Bank Loan was repaid on 01.04.2023. Dividend received during the year was ₹20,000. Dividend Proposed for the year 2022-23 was ₹50,000 but only ₹20,000 was approved by the Shareholders. Find out the cash flow from Financing Activities:

a) ₹ 1,50,000

b) ₹ 2,00,000

c) ₹ 1,70,000

d) ₹ 1,80,000

18. A company received insurance claim of 7,50,000 for repairing the building which was damaged due to earthquake. Expenses on repairing the building was 6,50,000. Balance ₹ 1,00,000 was shown as Other Income in the Statement of Profit & Loss. It will be shown in the Cash Flow Statement as follows:

a) Added to Net Profit before Tax and Extraordinary item under Cash Flow from Operating Activities and Outflow under Investing Activities.

b) Deducted from Net Profit before Tax and Extraordinary item under Cash Flow from Operating Activities and Inflow under Investing Activities.

c) Deducted from Net Profit before Tax and Extraordinary item under Cash Flow from Operating Activities and Inflow under Investing Activities as Extraordinary Item.

d) no adjustment will be made.

19. From the following information calculate cash from sale of machinery:

31^st March 2024                 31^st March 2023

Machinery                      ₹ 5,00,000          ₹ 3,00,000

Additional information:

Depreciation for the year ended 31^st March 2024 ₹ 80,000

Purchase of Machinery during the year ₹ 4,00,000

Part of machinery was sold at a profit of ₹ 50,000

a) ₹ 2,00,000

b) ₹ 2,50,000

c) ₹ 3,00,000

d) ₹ 3,50,000

20. Which of the following will result in flow of cash?

a) Cash withdrawn from the bank ₹60,000

b) ₹1,00,000, 9% debentures issued to vendors of machinery

c) ₹35,000 received from debtors

d) Cheques of ₹ 40.000 deposited in the bank

Class 12 Accountancy MCQs Cash Flow Statement

21. An investment normally qualifies as cash equivalent only when it has a Short maturity, of………..from the date of acquisition.

a) Three months or more

b) Six months or less

c) One year or less

d) Three months or less

22. Which of the following is not an Investing activity?

a) Purchase of marketable securities for ₹20,000 cash.

b) Sale of building for ₹80,000 cash.

c) Sale of 500 shares (held as investment) for ₹55 each.

d) Purchase of Machinery for ₹5,00,000 cash.

23. Which of the following activities are operating activities for the purpose of preparing 'Cash Flow Statement'?

(i) Dividend and Interest received on securities.

(ii) Payment of employee benefits expenses.

(iii) Cash receipts from royalties and fees.

(iv) Issue of shares against purchase of machinery.

a) (i), (ii) and (iii)

b) (ii), (iii) and (iv)

c) (i), (ii) and (iv)

d) (ii) and (iii)

24. Statement I: - Sale of Marketable Securities will result in no flow of Cash.

Statement II: - Debentures issued as collateral security will result in inflow of cash.

a) Both Statements are correct.

b) Both Statements are incorrect.

c) Statement I is correct and Statement II is incorrect.

d) Statement I is incorrect and Statement I is correct.

25. Insurance Claim received by BT. Ltd. of ₹ 5,00,000 for Loss of Machinery due to theft will be recorded in Cash Flow Statement in which of the following manner?

a) Added under Operating Activities as Extraordinary Item and Subtracted from Operating Activities also.

b) Subtracted under Operating Activities as Extraordinary Item and Added to Operating Activities also.

c) Subtracted under Operating Activities as Extraordinary Item and Inflow under Investing Activities also.

d) Added under Operating Activities as Extraordinary Item and Outflow under Investing Activity also.

26. 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 received from operating activities

b) Cash used (payment) in investing activities

c) Cash used (payment) from operating activities

d) Cash used (payment) from financial activities

27. If a machine whose original cost is ₹ 60,000 having accumulated depreciation ₹ 22,000, were sold for ₹ 40,000 then while preparing cash flow statement its effect on cash flow will be:

a) Cash flow from financing activities ₹ 40,000

b) Cash flow from financing activities ₹ 38,0000

c) Cash flow from investing activities ₹ 40,000

d) Cash flow from investing activities ₹38,000

28. ST Ltd. purchased furniture for ₹ 2,00,000 paying 60% by issue of equity shares of ₹ 10 each and the balance by a cheque. This transaction will result in:

a) Cash used in investing activities ₹ 2,00,000.

b) Cash generated from financing activities ₹ 1,20,000.

c) Increase in cash and cash equivalents ₹ 80,000.

d) Cash used in investing activities ₹ 80,000.

More questions will be added from time to time...

Class 12 Accountancy MCQs Cash Flow Statement - Answers

1. b) Financing
2. d) Cash received from Debtors ₹ 6,000.
3. b) ₹1,54,800
4. d) Cost of Revenue from Operations = Revenue from Operations - Gross Profit
5. b) Financing
6. c) Cash received on maturity of marketable securities
7. c) ₹ 2,40,000
8. b) Both Assertion and Reason are correct, but Reason is not the correct explanation of Assertion
9. d) Operating Profit = Revenue from Operations-Cost of Revenue from Operations
10. d) Short Term Borrowings
11. c) Cash received on maturity of marketable securities
12. c) No Flow of cash
13. b) Investing activity
14. a) 2,3,1
15. c) Statement I is correct and Statement II is incorrect
16. a) No effect
17. d) ₹ 1,80,000
18. c) Deducted from Net Profit before Tax and Extraordinary item under Cash Flow from Operating Activities and Inflow under Investing Activities as Extraordinary Item.
19. a) ₹ 2,00,000
20. c) ₹35,000 received from debtors
21. d) Three months or less
22. a) Purchase of marketable securities for ₹20,000 cash.
23. d) (ii) and (iii)
24. c) Statement I is correct and Statement II is incorrect.
25. c) Subtracted under Operating Activities as Extraordinary Item and Inflow under Investing Activities also.
26. b) Cash used (payment) in investing activities
27. c) Cash flow from investing activities ₹ 40,000
28. d) Cash used in investing activities ₹ 80,000.

Class 12 Accountancy MCQs Ratio Analysis

Learning Games and Activities in Accountancy – Class 12

MCQs on Analysis of Financial Statements

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Meaning

A cash flow statement is a statement prepared to show the changes in the historical position of cash and cash equivalents from operating activities, investing activities and financial activities, over an accounting year.

Accounting Standard - 3 (AS-3) issued by Institute of Chartered Accountants of India (ICAI), makes it compulsory for all listed companies to prepare and present Cash Flow Statement along with other financial statements.

Cash and cash equivalents:

Cash means - balance and bank balance (less Bank overdraft if any).

Cash equivalents - Marketable securities having a maturity period of equal to or less than three months e.g. treasury bills, commercial papers, money market funds etc.

Cash Flows - cash inflows/ cash outflows. There can be cash inflow or cash outflow from operating activities, investing activities and/or financing activities.

Operating activities mean principal revenue producing activities of the business.

Investing activities mean the activities relating to acquisition (purchase) and disposal (sale) of long-term assets.

Financing activities mean the activities affecting the size and composition of capital structure i.e. the Debt and Equity of the company.

How to Prepare Cash Flow Statement?

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When there is a transaction between one ‘cash’ item and the other ‘non-cash’ item. There is no cash flow when there is a transaction between ‘two cash items’ or ‘two non-cash items.’

For this purpose, ‘Cash’ means cash balance, bank balance and marketable securities and non-cash item means any current item (other than cash and cash equivalents) or any non-current item.

Transactions that do not result in Cash inflows/outflows.

(1) When there is movement among the cash and cash equivalents only, like:

1. Cash deposited into bank.

2. Cash withdrawn from bank for business use.

3. Purchase and sale of marketable securities being cash equivalents.

(2)  When there is movement among the non-cash items, like:

1. Purchase of fixed assets, purchase consideration paid by issue of shares/debentures.

2. Conversion of debentures into shares.

When Does Cash Flow Take Place?

Transactions that result in Cash inflows/outflows:

1. Operating activities mean principal revenue producing activities of the business like:

1. Cash sale of goods and services.

2. Cash receipts from royalties, fees, commission etc.

3. Cash payments for purchase of goods and services.

4. Cash payments for salaries, wages etc.

5. Cash payment/refund of Income Tax.

6. Cash receipts/payments relating to future contracts for trading purposes.

2. Investing activities mean the activities relating to acquisition (purchase) and disposal (sale) of long term assets like:

1. Cash paid for purchasing fixed assets.

2. Cash paid for purchasing long term investments.

3. Cash receipts from sale of fixed assets.

4. Cash receipts from sale of long-term investments.

5. Cash advances and loans made to outsiders.

6. Cash receipts from repayments of loans and advances to outsiders.

7. Cash receipts/payments relating to future contracts except for trading purposes or when considered as financing activities.

3. Financing activities mean the activities affecting the size and composition of capital structure i.e. the Debt and Equity of the company like:

1. Cash receipts from issue of Shares: Equity shares or/and Preference Shares.

2. Cash receipts from issue of Debentures or any other debt instruments.

3. Cash payments for Buy back of Equity shares.

4. Cash payments for Redemption of preference shares.

5. Cash payments for Redemption of Debentures or any other debt instruments.

6. Payment of Dividend on Equity/Preference shares.

7. Payment of Interest on Debentures and loans.

Cash Flow Statement

Which of these transactions would result in Cash Flow?

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1. Computation of Cash Flows from Operating activities:

Profit earned during the year                                                                   …

Add The Proposed Dividend for the Previous year                              …

Add The Interim Dividend paid during the year                                  …

Add Transfer to General Reserve                                                            …

Add The Provision for tax made during the year                                 ...

Less Refund of Income Tax                                                                     (…)

Less Extraordinary Income credited to Profit and Loss account    (…)

                                                                                                        -------------------

Net Profit before Tax and extraordinary Income                 ...

Adjustment for Non-cash/Non-operating items:

Add Depreciation                                                                                       …

Add Preliminary Expenses written off                                                  …

Add Discount on Issue of Shares/Debentures written off                …

Add Goodwill/patents/trademarks amortized                                   …

Add Loss on sale of fixed assets                                                            …

Add Interest on Loans borrowed and Debentures                           …

Less Interest/Dividend/Rental Income                                             (…)

Less Profit on sale of fixed assets                                                        (…)

                                                                                                                 -------------------

Operating Profit before Working Capital Changes                    ...

Add Decrease in Current Assets (except cash and cash equivalents)     ...

Add Increase in Current Liabilities (except Bank Overdraft)                  ...

Less Increase in Current Assets (except cash and cash equivalents)   (...)

Less Decrease in Current Liabilities (except Bank Overdraft)               (...)

                                                                                                               ----------------------

Cash generated from operations                                                     ...

Less Income Tax paid (Net of Tax refund received)                                ...

                                                                                                              ----------------------

Cash Flow before extraordinary items                                         ...

Add/Less Extraordinary items                                                                    ...

                                                                                                              -------------------------

Net Cash from (used in) Operating activities           ...

2. Computation of Cash Flows from investing activities:

Proceeds from sale of fixed assets/Investments/intangible assets            ...

Interest, Dividend (In case of Non-financing companies)                          ...

Rent received                                                                                                         ...

Less Purchase of Fixed assets/Investments/intangible assets                 (...)

Add/Less Extraordinary items                                                                          ...

                                                                                                                    -------------------

Net Cash from (used in) Investing activities                 ...

3. Computation of Cash Flows from Financing activities:

Cash receipts from issue of Equity Shares/ Preference Shares             ...

Cash receipts from issue of Debentures/any other debt instrument    ...

Proceeds from Bank Overdraft                                                                    ....

Cash payments for Buy back of Equity shares                                         (...)

Cash payments for Redemption of Preference shares                            (...)

Cash payments for Redemption of Debentures/loan                             (...)

Payment of Dividend on Equity/Preference shares                               (...)

Proposed Dividend of Previous Year                                                         (...)

Payment of Interest on Debentures and loans                                        (...)

Payment of Bank Overdraft                                                                       (....)

                                                                                                                 ---------------

Cash Flows from (used in) Financing activities      ...

                                                                                                         -----------------

Net Increase/Decrease in Cash and Cash Equivalents (1+2+3)  ...

Add Cash and Cash Equivalents in the beginning of the year     ...

(Cash in hand, bank balance, short term deposits and marketable securities)                                                                                                                                                                            ----------------

Cash and Cash Equivalents at the end of the year                        ...

(Cash in hand, bank balance, short term deposits and marketable securities)                                                                                                                                                                  ---------------

Note: 1.The amounts in brackets denote items to be subtracted (negative).

2. Bank Overdraft and Cash Credit are to be considered as Short Term Borrowings and dealt in Financing Activities.

How to Prepare Cash Flow Statement?

Steps in Cash flow Statement

Depreciation in Cash Flow Statement

Provision for Tax in Cash Flow Statement

Treatment of Proposed Dividend in Cash Flow Statement

The post How to Prepare Cash Flow Statement? appeared first on Commerceatease - Website for 11th & 12th Commerce.

The steps in preparing Cash Flow statement can be summed up as under:

(A) Cash flows from operating activities                                       ...

(B) Cash flows from investing activities                                       ...

(C) Cash flows from financing activities                                       ...      ----------

Net increase/decrease in cash and cash equivalents (A + B + C)   ...

Add Cash and cash equivalents at the beginning                                 ...                                                                                                                                                       --------

Cash and cash equivalents at the end                                                        ...

                                                                                    --------

Cash Flow Statement – Illustration 1

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Depreciation is treated at two places:

(1) Added while calculating Cash from Operating activities.

(2) Considered while preparing concerned asset account for calculating cash from/used in investing activities.

Preparation of Fixed Asset Account:

Simple abbreviations have been used for maintaining the simplicity of account without affecting the treatment, like: { I, O} mean Investing activities involving outflow of cash, { I, I } means investing activities involving inflow of cash, { O, A} means while calculating cash from Operating activities this item is to be added and vice-versa in case of { O,L}.

(1) When asset account is to be prepared at book value.

If asset appears in the Balance sheet at book value following entries appear in the asset account prepared for this purpose:

Dr.                                                        Asset Account (at Book Value)                                Cr.

Depreciation in Cash Flow Statement

(2) When asset account is to be prepared at Cost.

When asset appears at cost, there is another account which must be prepared, known as Accumulated depreciation account that appears in the Balance sheet. These are to be prepared as under:

Dr.                                                                  Asset Account ( at Cost)                           Cr.

Dr.                                                           Accumulated Depreciation Account                             Cr.

If Asset Disposal Account is to be prepared the above-mentioned accounts will appear as under along with asset disposal account:

Dr.                                                    Asset Account ( at Cost)                                Cr.

Dr.                             Accumulated Depreciation Account                         Cr.

Dr.                                                 Asset Disposal Account                                                    Cr.

Treatment of Proposed Dividend in Cash Flow Statement

Provision for Tax in Cash Flow Statement

MCQ based Revision Tests in Accountancy Class 12

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Dividend can appear in the question in the following names:

(1) Proposed dividend:

Meaning: It is the dividend proposed by the board of directors after finalization of Accounts but is to be approved by the shareholders in the annual general meeting (held next year). When approved, It must be paid within 30 days.

It is an appropriation of profits, debited to Surplus i.e., Balance in Statement of Profit and Loss.

Paid in the same year, it is declared.

It cannot be recorded in the Balance sheet but is recorded as Contingent Liability in the Notes to Accounts.

Treatment: Previous year proposed dividend is added while calculating profit before tax and the same (previous year proposed dividend - Unpaid or Unclaimed Dividend) is considered as outflow in financing activities.

Current Year Proposed Dividend is to be ignored in Cash Flow Statement.

Proposed Dividend in Cash Flow Statement

(2) Interim Dividend:

Meaning: It is the dividend declared by the board of directors within the financial year if permitted by the articles of association of the company. However, It is not required to be approved by the shareholders but must be paid within 30 days of its declaration.

As, It is an appropriation of profits, debited to Surplus i.e., Balance in Statement of Profit and Loss.

Interim dividend is paid in the same year, it is declared.

It appears outside the balance sheet as additional information.

Treatment: It is added while calculating profit before tax and the amount paid (Declared - Unpaid or Unclaimed) is considered as outflow in financing activities.

Dividend on Preference Shares:

Dividend on Preference Shares is to be paid before Equity Dividend, at a particular rate as agreed, only out of available profits.

It is proposed by the Board of Directors and declared (approved) by the shareholders in AGM (held next year) like Proposed (Final) Dividend on Equity Shares.

It appears outside the balance sheet as additional information.

Treatment: Same as in case of Proposed Dividend on Equity Shares.

Provision for Tax in Cash Flow Statement

MCQ based Revision Tests in Accountancy Class 12

Self-Learning Activities in Accountancy Class 12

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(1) If the provision for taxation account appears only in the balance sheet:

In this case the previous year amount is treated as outflow in operating activities and the current year amount is added while calculating the profit before tax.

(2) If the provision for taxation account appears in the balance sheet and additional information is also given regarding the payment or provision for tax during the year. In this case the Provision for Taxation account is to be prepared, and the treatment done accordingly.

Dr.                                                 Provision for Taxation account                                                Cr.

(3) If only additional information is given regarding Provision for Tax made or Tax paid, the same amount given is to be treated as outflow in operating activities and is added while calculating Profit before Tax.

Refund of Tax

Whenever Refund of Tax is given in additional information, it is subtracted next to Provision for Tax, while calculating Profit before Tax and added next to Tax paid while calculating Cash from Operating Activities.

Provision for Tax in Cash Flow Statement

Taxes on Capital Profits and Dividend distributed

Besides Income Tax, there can be capital gains tax (tax on capital profits on fixed assets sold), dividend tax (tax on the amount distributed as dividend to shareholders).

As per AS-3 cash flows arising from taxes on income should be separately disclosed in different activities. Such Cash flows should be classified as cash flows from operating activities if they cannot be specifically identified with financing and investing activities.
Thus, they should be treated as:

1. Tax on operating profit - Operating Activities.
2. Dividend tax - Financing activity along with dividend paid.
3. Capital gains tax - Investing activities.

Depreciation in Cash Flow Statement

Proposed Dividend in Cash Flow Statement

Class 12 Accountancy MCQs Cash Flow Statement

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While preparing Cash Flow Statement, the following special points must be considered carefully:

1. First of all, check the accounting years on the top of the Balance Sheet, check whether the previous year and current year information is given or current year and previous year information is given, as reading it the opposite way will lead to totally wrong solution.
2. In notes to Accounts, consider the sub items only as given in the notes to accounts, ignoring the main head of the item given in the Balance Sheet, to avoid problem of double counting.
3. Regarding Implied adjustments: If rate of interest is mentioned with Debentures, it must be considered as expense and treated accordingly.
4. It is not necessary that the result of all the types of activities is inflow or outflow of cash, sometimes it can be nil, must show all the parts of Cash Flow Statement, anyhow.
5. While attempting question in exam, check whether only operating/ Investing/ Financing activities has been asked or Cash Flow Statement as a whole, has been asked.
6. Issue of bonus shares do not result in cash flow.
7. Debentures are assumed to be redeemed at the end of the accounting year (if date of redemption is not given) so interest is calculated at the opening balance.
8. Debentures are assumed to be issued at the end of the accounting year (if date of issue is not given) so interest is calculated at the opening balance.
9. Non-cash transactions must be excluded for calculating cash inflow/outflow.
10. Discount on issue of shares/debentures must be considered at the time of calculating cash from financing activities, by showing the net amount received only.
11. When there is increase in the value of goodwill, the result is to be shown as cash used in investing activities for purchasing goodwill.
12. When there is decrease in general reserve, the effect should be seen on shares (issued as bonus shares), or declaration and payment of Dividend, and should be considered accordingly.
13. Items of Balance Sheet with Notes to Account should be treated from Notes to Account only, not from Balance Sheet, so that there is no Double Counting. At the same time there won't be any chance of skipping any item from consideration.

Check Your Understanding

Class 12 Accountancy MCQs Cash Flow Statement

Self-Learning Activities in Accountancy Class 12

MCQ based Revision Tests in Accountancy Class 12

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Cash Flow Statement - Illustration 

Classify the following Types of Activities in Cash Flow Statement into operating activities, investing activities, financing activities, cash activities:

However, every item should be considered according to the additional information if any.

Cash Flow Statement MCQs

Cash Flow Statement – Illustration 2

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