Question 1

The mirror which reflects the true financial position of the business as on a particular date

Accepted Answer

The balance sheet reflects the true financial position of a business as on a particular date, showing assets, liabilities, and equity.

Question 2

An appropriation of profit is ---------------------

Accepted Answer

An appropriation of profit is a portion of a company's profit set aside for a specific purpose, such as taxation, and is therefore considered a provision for taxation.

Question 3

Fund flow statement are very useful in planning intermediate and ----------- financing.

Accepted Answer

Fund flow statements are useful in planning long-term financing as they help in understanding the changes in financial position over a period, which is crucial for long-term financial planning.

Question 4

The two concept of working capital are gross working capital and --------------------------

Accepted Answer

Gross working capital refers to the total current assets of a company, while net working capital is the difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency of the company.

Question 5

Excess of current asset over current liability is known as -------------

Accepted Answer

Net working capital is defined as the excess of current assets over current liabilities. This metric is used to assess a company's liquidity, operational efficiency, and short-term financial health.

Question 6

Flow of fund means change in -------------------

Accepted Answer

Flow of fund refers to the change in working capital, which is the difference between current assets and current liabilities. It indicates the liquidity and operational efficiency of a business.

Question 7

An essential tool of short term financial analysis

Accepted Answer

The cash flow statement is an essential tool for short-term financial analysis as it provides insights into the liquidity and cash position of a company, helping to assess its ability to meet short-term obligations.

Question 8

A statement depicting the reasons for the change in cash position from one period to another

Accepted Answer

A cash flow statement specifically outlines the reasons for the change in cash position of a company from one period to another, detailing how cash is received and spent.

Question 9

Cash flow statement shows the causes for changes in__________

Accepted Answer

The cash flow statement is specifically designed to show the changes in the cash balance of a company over a period. It categorizes cash flow into operating, investing, and financing activities to provide insights into the company's cash generation and spending.

Question 10

A statement prepared in the form of report

Accepted Answer

A cash flow statement is prepared in the form of a report to show the inflows and outflows of cash within a company over a specific period.

Question 11

Cash flow is a part of

Accepted Answer

Cash flow is a part of fund flow, as it details the inflow and outflow of cash, which is a component of the broader concept of fund flows. Fund flows encompass all types of financial movements, including cash.

Question 12

Cash receipts from royalties is an example of cash flow from__________

Accepted Answer

Cash receipts from royalties are considered operating activities as they are part of the company's primary revenue-generating activities.

Question 13

Cash flow from financing activities include payment of interest on borrowing and___ to share holders

Accepted Answer

Dividend payments to shareholders are considered a part of cash flow from financing activities because they represent cash outflows to investors, reflecting the distribution of profits earned by the company.

Question 14

When the opening balance of cash and cash equivalent is added to the net increase , the total will be the____________

Accepted Answer

The answer of When the opening balance of cash and...

Question 15

Cash payment on redemption of debenture is an example of cash flow from _________ activities

Accepted Answer

Cash payment on redemption of debenture is considered a financing activity because it involves the company's management of its capital structure, including debts and equity. Financing activities include transactions related to long-term liabilities and equity, such as issuing and redeeming debt or equity.

Quiz 8: Financial Statements and Cash Flow Analysis