Deck 5: Fund Flow and Working Capital Management

Question 1

Any gain on sale of non-current asset should be ----- from the net profit for determining funds from operation

A)Deducted
B)Added
C)Increased
D)None of these

Answer 1

Deducted

Question 2

Asset sold on credit is---- of funds

A)Application
B)Uses
C)Source
D)Decrease

Answer 2

Source

Question 3

Furniture sold for cash -----funds flow

A)Increases
B)Decreases
C)Deducted
D)None of these

Answer 3

Increases

Question 4

Goodwill is a ---------------------transaction

A)Current
B)Noncurrent
C)Fixed
D)None of these

Question 5

When one account is current and another a non-current It results in--------------------

A)Flow of fund
B)Increase of fund
C)Decrease of fund
D)None of these

Question 6

To arrive at funds from operation ,non-cash expenses must be added to----------

A)Net profit
B)Gross profit
C)Operating profit
D)None of these

Question 7

Fund flow statement is accompanied by a schedule of-----------------------------

A)Changes in working capital
B)Flow of funds
C)Increase in fund
D)Decrease in fund

Question 8

Goods purchased on credit-----------inflow of funds

A)Does not result
B)Does result
C)Change
D)None of these

Question 9

----------account is prepared to know funds from operation

A)Profit & Loss appropriation account
B)Profit and loss account
C)Trading account
D)Profit & Loss adjustment account

Question 10

Increases in current liabilities --------------working capital

A)Increase
B)Decreases
C)Added
D)None of these

Question 11

Increase in current assets-------------working capital

A)Increases
B)Decreases
C)Deducts
D)Reduces

Question 12

Decrease in current liabilities --------------------working capital

A)Increases
B)Decrease
C)Deducts
D)Reduces

Question 13

Net increase in working capital results in----------------of funds

A)sources
B)inflow
C)no change
D)application

Question 14

Net decrease in working capital results in --------------------of funds

A)Source
B)Application
C)No change
D)None of these

Question 15

-------------------means transfer of economic value of firm from one asset or equity to another.

A)Flow of funds
B)Uses of fund
C)Inflow of funds
D)Application of funds

Question 16

Funds from operations are --------------of funds

A)Application
B)Uses
C)Sources
D)No change

Question 17

In the fund flow statement, depreciation is----------------

A)Deducted from net profit
B)Added to net profit
C)Sources of working capital
D)Ignored

Question 18

Which of the following is non-current asset

A)Goodwill
B)Debtors
C)Stock
D)Prepaid rent

Question 19

Which of the following will affect the flow of fund

A)a transaction affecting current and non-current accounts
B)a transaction affecting both non-current accounts
C)a transaction affecting both current accounts
D)both a and b

Question 20

Which of the following is an application of fund

A)Sale of plant
B)Issue of shares
C)Purchase of funds
D)Payment of creditors

Question 21

Current assets are Rs.6,00,000 current liabilities are Rs.3,00,000 the debtors realized Rs.40,000, the impact on net working capital would be-------------------------

A)No change in working capital
B)Decrease of working capital by Rs.80,000
C)Increase of working capital by Rs.40,000
D)None of these

Question 22

Gross profit are Rs.50,000 and expenses not result in the application of funds are Rs.10000 funds from operation will be

A)Rs.60000
B)Rs.50000
C)Rs. 40000
D)Rs. 30000

Question 23

Which of the following is a non-current liability

A)Mortgage loan
B)Bank balance
C)Outstanding salary
D)None of these

Question 24

Current liabilities are equals to-------------------------------

A)Working capital +current assets
B)Working capital-current assets
C)Current assets-working capital
D)Current asset + working capital

Question 25

Inflow of fund does not take place due to----------------

A)Funds from operation
B)Increase in capital
C)Increase in working capital
D)Sale of fixed asset