Accountancy M.C.Q (1 Marks)

2. ₹ 16,000

4. Striking the right balance between decentralization and centralization.

1. Dividend on investment

2. Cash basis of accounting.

2. Flow of funds

Explanation:

Flow of funds are used to track the the flow of money to and from various sectors of a national economy. It is used to track the changes in the assets and liabilities of the company. It depicts the changes in funds as well as changes in working capital.

1. Projected cash flow statement

1. Cash Sales

2. Changes in Fixed assets and Fixed Liabilities

Explanation:

Funds Flow Statement is a statement prepared to analyse the reasons for changes in the Financial Position of a Company between two Balance Sheets.

It shows the inflow and outflow of funds i.e. Sources and Applications of funds for a particular period.

It is a statement which involves no error in the amount of funds inflow and outflow as it pays attention on the changes in value of fixed assets and fixed liabilities.

2. Trading commission received by a manufacturing company

4. All the above

4. Cash Sales

1. Investment, financing and dividend decisions

Explanation:

Investment decision- It helps in determine how scarce resources are committed to projects.

Financing decision- Acquiring finance to meet finance objectives & seeing that working capital is effectively manages.

Dividend decision- Determination of quantum of profits to be distributed.

4. In both & (c)

1. Payment of dividend.

3. Accumulated depreciation a/c

Explanation:

Accumulated depreciation is the cumulative depreciation of an asset up to a single point in its life. Accumulated depreciation is a contra asset account, meaning its natural balance is a credit that reduces the overall asset value.

It will be shown in profit and loss account as it is constituted from t more than one year's depreciation.

3. Deducted

3. Operating activities

Explanation:

Cash flow from operating activities are primarily derived from the main activities of the enterprises.

Therefore, they generally result from the transactions and other events that enter into the determination of net profit or loss.

Operating activities includes cash payments or refunds of income taxes unless they can be specifically identified with financing and investing activities.

1. Operating activities

Explanation:

Cash flows from interest and dividends received and paid should each be disclosed separately. Cash flows arising from interest paid and interest and dividends received in case of a financial enterprise should be classified as cash flows arising from operating activities.

In the case of other enterprises, cash flows arising from interest paid should be classified as cash flows from financing activities while interest and dividends received should be classified as cash flows from investing activities.

1. Increase in Creditors

2. Investing activities.

2. Extraordinary items

Explanation:

Extraordinary items in accounting are income statement events that are both unusual and infrequent. These are transactions that are abnormal and don't relate to the principal business activities.

They also are not predictable or occur on regular basis. For example, if company reported a huge loss from natural disaster in its income from operations, the net operating income would be artificially low even though its operations might be higher than last year.

2. Application of funds

Explanation:

When taxes are paid, there is an outflow of funds, i.e. an application of funds (for the actual amount so paid).

But if there is a provision for tax, there will not be any outflow of funds. Outflow of funds will arise only when actual payment is made.

1. Source of funds

Explanation:

Source of funds results in the generation of cash for the company. Stock at the end has two aspects in the financial statements. One effect is credited to trading account and other one is shown as asset in the balance sheet. Assets are nothing but the sources of funds. Hence stock at the end results in source of funds.

3. Real Discount Rate

Explanation:

The real discount rate is used to convert between one-time costs and annualized costs. HOMER calculates the annual real discount rate (also called the real interest rate or interest rate) from the "Nominal discount rate" and "Expected inflation rate" inputs.

HOMER uses the real discount rate to calculate discount factors and annualized costs from net present costs. Since, in real discount rate, it involves the affect of inflation rate present values of the cashflows will be close to the actual cash flows.

1. Depreciation

Explanation:

Cash outflow is the amount of cash that a business disburses.

Cash outflow results from expense or investments.

A company may be required to seek additional finance if cash outflow exceeds cash inflow.

4. Loss on the sale of motor car

Explanation:

One-time transactions that result in losses can also be considered non-operating expenses. Losses on these investments may be recorded as non-operating losses and are non-operating expenses.

1. Creditors issued bills payable

3. Decrease in Creditors

1. Fund position

Explanation:

The cash flow statement (previously known as the flow of funds statement), shows the sources of a company's cash flow and how it was used over a specific time period.

2. Extraordinary Items

2. 40000

2. Cash flow to total debt ratio

4. Investment

2. Purchase of Fixed Asset

1. Cash basis of accounting

2. Non-cash charges

4. No flow of fund

Explanation:

When a cash payment is received from the debtor, cash is increased and the accounts receivable is decreased. When recording the transaction, cash is debited, and accounts receivable are credited.

A debtor is a person, company, or other entity that owes money. In other words, the debtor has a debt or legal obligation to pay the amount owed. So the cash received from debtors is no flow of funds.

3. Purchases of Inventory for Cash

3. Funds provided by operation

Explanation:

Funds from operations refers to the figure used by real estate investment trusts to define the cash flow from operations.It is calculated as new profit earned plus non working capital expense.

2. Rs 27, 000.00

4. Ignored in cash-flow statement

Explanation:

Any transaction that does not result in inflow or outflow of cash from the business is ignored in the cash flow statement of an entity. For example, a purchase of building by the issue of debentures, exchange of plant and machinery for replacement purposes, etc.

1. Source

3. Economic

3. Project net present value

3. Both (A) and (B)

Explanation:

Statement of cash flows, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Cash flow statement is a statement showing the inflow and outflow of the cash of a company classified in 3 categories of activities:

Operating cash flows

Investing cash flows

Financing cash flows

It involves movement of the cash in the company from these 3 categories of activities. Therefore, It is a statement depicting changes in cash position from one period to another.

2. Rs6,00,000

Explanation:

Calculation 0f Amount of funds from operation =

Net Profit + Closing Depreciation - Depreciation in the beginning

= 500000 + 250000 - 150000 = 600000

2. Decrease in cash

2. Rs 124000

3. Cash Flow from Financing Activities

4. All the Above