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Vidaara.orgClass 12 · Mathematics
CodeVID-M12-WS
Cash Flow Statement — Practice Worksheet
Chapter: Cash Flow Statement
Topic: Cash Flow Statement
Maximum Marks: 35
Time: 30 minutes
Name: ____________________ Roll No.: __________ Date: ____________

General Instructions

  • All questions are compulsory.
  • Choose the correct option (A, B, C or D) for each question.
  • The answer key is at the end — try the paper first!
Section A — Multiple Choice (1 mark each) 15 × 1 = 15 marks
1.
A cash flow statement shows the inflows and outflows of:
  • A.Profit
  • B.Cash and cash equivalents
  • C.Stock
  • D.Capital only
2.
The cash flow statement is prepared as per:
  • A.AS-3 (Revised)
  • B.AS-26
  • C.Schedule III only
  • D.GST law
3.
Cash flows are classified into how many activities?
  • A.Two
  • B.Three
  • C.Four
  • D.Five
4.
Cash received from customers is an ____ activity.
  • A.Operating
  • B.Investing
  • C.Financing
  • D.None
5.
Purchase of machinery is an ____ activity.
  • A.Operating
  • B.Investing
  • C.Financing
  • D.None
6.
Issue of shares for cash is a ____ activity.
  • A.Operating
  • B.Investing
  • C.Financing
  • D.None
7.
In the indirect method, operating cash flow starts from:
  • A.Sales
  • B.Net profit before tax
  • C.Cash balance
  • D.Total assets
8.
Depreciation in the indirect method is:
  • A.Subtracted
  • B.Added back
  • C.Ignored
  • D.A cash outflow
9.
An increase in debtors is ____ in operating cash flow.
  • A.Added
  • B.Subtracted
  • C.Ignored
  • D.Financing
10.
An increase in creditors is ____ in operating cash flow.
  • A.Subtracted
  • B.Added
  • C.Ignored
  • D.Investing
11.
Sale of a fixed asset is an ____ activity.
  • A.Operating
  • B.Investing
  • C.Financing
  • D.None
12.
Dividend paid by a company is a ____ activity.
  • A.Operating
  • B.Investing
  • C.Financing
  • D.None
13.
Interest received on investments is generally an ____ activity (non-finance firm).
  • A.Operating
  • B.Investing
  • C.Financing
  • D.None
14.
Net increase in cash =
  • A.Operating + Investing + Financing flows
  • B.Operating only
  • C.Sales − purchases
  • D.Profit − tax
15.
Closing cash must agree with the cash and bank balances in the:
  • A.Trial balance
  • B.Balance Sheet
  • C.Journal
  • D.Cash memo
Section B — Challenge / Olympiad (2 marks each) 10 × 2 = 20 marks
16.
Net profit before tax Rs 1,50,000; depreciation Rs 30,000; profit on sale of asset Rs 8,000. Operating profit before working-capital changes is:
  • A.Rs 1,72,000
  • B.Rs 1,88,000
  • C.Rs 1,12,000
  • D.Rs 1,80,000
17.
During the year debtors rose Rs 40,000, creditors rose Rs 25,000 and inventory fell Rs 10,000. The net working-capital adjustment to operating cash is:
  • A.−5,000
  • B.+5,000
  • C.−55,000
  • D.+75,000
18.
Why does a profitable company sometimes show NEGATIVE operating cash flow?
  • A.Profit is locked in rising debtors/inventory, so cash hasn't been received
  • B.It paid a dividend
  • C.It bought machinery
  • D.It issued shares
19.
A machine (book value Rs 50,000) is sold for Rs 60,000. In the cash flow statement this gives:
  • A.Investing inflow Rs 60,000; and Rs 10,000 profit removed from operating profit
  • B.Operating inflow Rs 60,000
  • C.Financing inflow Rs 60,000
  • D.Investing inflow Rs 50,000 only
20.
Operating cash flow +Rs 3,00,000; investing −Rs 2,40,000; financing −Rs 20,000; opening cash Rs 60,000. Closing cash is:
  • A.Rs 1,00,000
  • B.Rs 40,000
  • C.Rs 1,40,000
  • D.Rs 80,000
21.
For a normal (non-finance) company, interest paid on a loan is classified as:
  • A.Financing outflow
  • B.Operating outflow
  • C.Investing outflow
  • D.Not shown
22.
Proposed dividend of the previous year, paid this year, is shown as:
  • A.A financing outflow when actually paid
  • B.An operating item
  • C.An investing inflow
  • D.Ignored
23.
Which item is added back to net profit AND also shown separately as an outflow elsewhere?
  • A.Interest on borrowings (added back in operating, shown as financing outflow)
  • B.Sales
  • C.Closing stock
  • D.Share capital
24.
Closing cash computed in the statement does NOT match the balance sheet's cash. This means:
  • A.An error or omission in the cash flow statement
  • B.Normal
  • C.High profit
  • D.More dividends
25.
The fundamental purpose of the cash flow statement is to:
  • A.Explain why cash changed and bridge the gap between profit and cash
  • B.Replace the balance sheet
  • C.Compute tax
  • D.List all ratios

Answer Key

Section A — Multiple Choice (1 mark each)
  1. (B) Cash and cash equivalents
  2. (A) AS-3 (Revised)
  3. (B) Three
  4. (A) Operating
  5. (B) Investing
  6. (C) Financing
  7. (B) Net profit before tax
  8. (B) Added back
  9. (B) Subtracted
  10. (B) Added
  11. (B) Investing
  12. (C) Financing
  13. (B) Investing
  14. (A) Operating + Investing + Financing flows
  15. (B) Balance Sheet
Section B — Challenge / Olympiad (2 marks each)
  1. (A) Rs 1,72,000
  2. (A) −5,000
  3. (A) Profit is locked in rising debtors/inventory, so cash hasn't been received
  4. (A) Investing inflow Rs 60,000; and Rs 10,000 profit removed from operating profit
  5. (A) Rs 1,00,000
  6. (A) Financing outflow
  7. (A) A financing outflow when actually paid
  8. (A) Interest on borrowings (added back in operating, shown as financing outflow)
  9. (A) An error or omission in the cash flow statement
  10. (A) Explain why cash changed and bridge the gap between profit and cash
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