Cash Flow Statement - Class 12 Accountancy - Chapter 10 - Notes, NCERT Solutions & Extra Questions
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Extra Questions - Cash Flow Statement | NCERT | Accountancy | Class 12
Difference between the amounts of the statement of affairs is taken as:
A) Income
B) Capital
C) Expenses
D) Assets
The correct answer is B) Capital.
The difference between the amounts in the statement of affairs is typically considered as capital changes, reflecting the adjustments in the owner's equity over a period due to business transactions.
Which technique is used for figures of two or more periods to be placed side by side to facilitate easy and meaningful comparisons?
A. Comparative statements
B. Common size statements
C. Cash flow statements
D. None of these
The correct answer is A. Comparative statements.
Comparative statements are the financial tools used to present figures for two or more reporting periods side by side. This arrangement facilitates easy and meaningful comparisons between different periods, allowing analysts to track performance, trends, and changes over time effectively.
Which of the following are factors affecting the requirement of working capital?
A) Length of operating cycle
B) Scale of operation
C) Business cycle fluctuations
D) All of the above
The correct answer is D) All of the above.
Length of operating cycle, scale of operation, and business cycle fluctuations all significantly influence the requirement of working capital. Each of these factors plays a crucial role in determining how much working capital a business needs to operate efficiently.
A company has sold 10,000 tonnes of steel to its customer. The sale contract provides for a normal credit period of three months. The company's operating cycle is six months. However, the company does not expect to receive the payment within twelve months from the reporting date. It shall be classified as:
A) Current assets B) Current liabilities C) Non-current assets D) None of these
The correct answer is C) Non-current assets.
The classification of the assets from the sale of steel should be regarded as Non-current assets on the Balance Sheet since the payment is expected to be received after more than twelve months from the reporting date, which is longer than the operating cycle of six months.
Capital expenditure impacts the profit.
A) increases
B) decreases
C) does not impact
The correct answer is C) does not impact.
Capital expenditure, often abbreviated as CapEx, is money invested by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment. This type of spending is considered an investment in the business rather than an expense. Capital expenditure does not impact the profit directly, since it is capitalized and then depreciated over the life of the asset rather than being expensed immediately. Thus, it does not affect the profit and loss statement in the short term.
Net Sales + Beginning Accounts Receivables - Closing Accounts Receivables is equal to ______
A Cash paid to suppliers
B Cash receipts from customers
C Cash payments to employees
D None of these
The correct answer is B. Cash receipts from customers.
The formula Net Sales + Beginning Accounts Receivables - Closing Accounts Receivables essentially represents the cash receipts from customers. This calculation adjusts for the accounts receivables at the beginning and the end of the period to give the actual cash received from customers during that period.
"Increase in current liabilities like accounts payable, accrued liabilities, etc. are under indirect method.
A) added
B) deducted
C) not treated
D) multiplied"
The correct answer is A) added.
When using the indirect method to calculate cash flow from operations, any increase in current liabilities, such as accounts payable or accrued liabilities, is added to the net income. This addition is necessary because the increase in liabilities suggests that more cash is available within the company, as these liabilities represent money that has not yet been paid out. Conversely, a decrease in liabilities would imply less cash availability and would be subtracted. Hence, under the indirect method, increases in current liabilities are always added.
Statement 1: Jerusalem is a holy place only for the Jews. Statement 2: The Zionist movement's main objective was to form a separate state for the Jews. Choose the correct statement.
A Statement 1 is true and Statement 2 is false.
B Statement 1 is false and Statement 2 is true.
C Both Statements 1 and 2 are true.
D Both Statements 1 and 2 are false.
The accurate answer to this question is option B: Statement 1 is false and Statement 2 is true.
Statement 1 claims Jerusalem is a holy place only for the Jews. This statement is false because Jerusalem is considered a sacred city not only by Jews but also by Christians and Muslims.
Statement 2 outlines that the main objective of the Zionist movement was to form a separate state for the Jews. This statement is true. Following World War II, the Zionist Movement was pivotal in advocating for Jewish unity, claiming Palestine as their homeland, and striving to establish an independent Jewish state.