Economics for Engineers (3140911) MCQs

MCQs of Cash Flow, Interest and Equivalence

Showing 1 to 10 out of 85 Questions
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1.
A financial statement that shows the inflows and outflows of cash during a particular period of time is known as
(a) Income statement
(b) Statement of retained earnings
(c) Balance sheet
(d) Statement of cash flows
Answer:

Option (d)

2.
A statement of cash flows has
(a) 3 sections
(b) 4 sections
(c) 5 sections
(d) 6 sections
Answer:

Option (a)

3.
Which of the following is not an operating cash flow?
(a) Collection of cash from receivables
(b) Payment of income tax
(c) Payment of cash for operating expenses
(d) Purchase of equipment for cash
Answer:

Option (d)

4.
Which of the following is not an investing cash flow?
(a) Purchase of marketable securities for Rs. 25,000 cash
(b) Sale of land for Rs. 28,000 cash
(c) Sale of 2,500 shares of common stock for Rs. 15 each
(d) Purchase of equipment for Rs. 500 cash
Answer:

Option (c)

5.
Which of the following is not a financing activity?
(a) Issuance of bonds payable
(b) Sale of investment
(c) Purchase of treasury stock
(d) Issuance of common stock
Answer:

Option (b)

6.
Which of the following is not a non-cash investing and financing activity?
(a) Conversion of bonds into common stock
(b) Purchase of land by issuing common stock
(c) Conversion of preferred stock into common stock
(d) Repayment of short-term loan
Answer:

Option (d)

7.
Significant non-cash investing and financing activities are reported in the
(a) Operating activities section of statement of cash flows
(b) Investing activities section of statement of cash flows
(c) Foot notes or separate notes to the financial statements
(d) Financing activities section of statement of cash flows
Answer:

Option (c)

8.
A company sells an old piece of equipment for Rs. 5,000 cash. The book value of the equipment sold is Rs.4,500. The gain of Rs. 500 will affect
(a) Operating activities section
(b) Investing activities section
(c) Financing activities section
(d) Notes to the financial statements
Answer:

Option (a)

9.
Under indirect method of preparing statement of cash flows, depreciation expense affects
(a) Operating activities section
(b) Investing activities section
(c) Financing activities section
(d) Notes to the financial statements
Answer:

Option (a)

10.
A company sells old plant for Rs. 12,000 cash. The book value of the plant is Rs. 7,000. This transaction would affect
(a) Operating activities & financing activities
(b) Operating activities & investing activities
(c) Financing activities & investing activities
(d) Operating activities and foot notes
Answer:

Option (b)

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