Practice Introduction (1) - Cash Flow

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9 questions

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6 sample questions

Question 1.
What is a Cash Flow Statement?
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Think about cash management in a business.
Question 2.
Name one objective of preparing a Cash Flow Statement.
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Why does a company need to know its cash situation?
3Question 3.
What does the Cash Flow Statement primarily focus on?
- Profit Margin
- Cash Transactions
- Sales Revenue
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It tracks how cash flows through a business.
4Question 4.
True or False: The Cash Flow Statement is prepared on an accrual basis.
- True
- False
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Think about what transactions count.
Question 5.
Using the following financial data, prepare a Cash Flow Statement: Net Profit before tax: ₹150,000, Depreciation: ₹30,000, Tax Paid: ₹20,000, Increase in Debtors: ₹15,000, Increase in Creditors: ₹10,000.
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Consider how each element affects cash flow.
Question 6.
Identify the cash flow effect of selling equipment at a loss versus gaining on an investment, and provide a brief explanation.
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Think about gains and losses affecting cash flow.

5 more questions in this section. Enroll free to practise them all.