Which of the following statements are true?
A) Cash flow reveals only the inflow of cash
B) Cash flow reveals only the outflow of cash
C) Cash flow is a substitute for income statement
D) Cash flow statement is not a replacement of funds flow statement.
a. Only A
b. Only B
c. Both B and C
d. Only D
Ans – d
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Liquidity ratios are expressed in ……
a. Pure ratio form
b. Percentage
c. Rate or time
d. None of the above
Ans – a
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A change in credit policy has caused an increase in sales, an increase in discounts taken, a reduction of the investment in accounts receivable, and a reduction in the number of doubtful accounts. Based on this information, we know that ……
a. Net profit has increased
b. The average collection period has decreased
c. Gross profit has declined
d. The size of the discount offered has decreased
Ans – b
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A firm following an aggressive working capital strategy would
a. Hold substantial amount of fixed assets
b. Minimize the amount of short-term borrowing
c. Finance fluctuating assets with long-term financing
d. Minimize the amount of funds held in very liquid assets
Ans – d
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From the following which is method for the preparation of Trial Balance ……
a. Balance Method
b. Total Method
c. Total-cum-Balance Method
d. All of the above
Ans – d
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Bank reconciliation is a statement prepared to reconcile ……
a. Trial balance
b. Cash book
c. Bank A/c
d. Cash as per cash book with bank balance as per bank pass book
Ans – d
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Entry for the transaction which is recorded on both side fo the Cash Book is called ……
a. Closing Entry
b. Contra Entry
c. Opening Entry
d. Adjustment Entry
Ans – b
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A consumer purchase ……
a. Is a purchase from someone in the business of providing consumer goods or services
b. Is a purchase – other than a cash purchase – from someone in the business of selling consumer goods or services
c. Is a purchase that may involve the purchase of goods by a merchant for resale
d. Is a purchase of goods for a business or professional use
Ans – b
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Entry for the transaction which is recorded on both side fo the Cash Book is called ……
a. Closing Entry
b. Contra Entry
c. Opening Entry
d. Adjustment Entry
Ans – b
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A consumer purchase ……
a. Is a purchase from someone in the business of providing consumer goods or services
b. Is a purchase – other than a cash purchase – from someone in the business of selling consumer goods or services
c. Is a purchase that may involve the purchase of goods by a merchant for resale
d. Is a purchase of goods for a business or professional use
Ans – b
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