SCF

Which of the following events increases cash balance?

• Bank not granting loan

• Debtors paying to the company

• Loan repayment to creditors

• Sale of stock on account

Which of the following events reduce cash balances?

• Purchase of fixed assets

• Acquired assets on credit

• Purchase of stock on account

• Creditors grant loans

What is the effect of paying loan principal on cash flow and profits?

• On profit – Decrease; On cash - Decrease

• On profit – Decrease; On cash - None

• On profit – Increase; On cash - Decrease

• On profit – None; On cash – Decrease

Which of the following is false?

• A profitable business will never run out of cash.

• Companies undergoing expansion can sometimes face a cash shortage.

• In case cash outflows exceed cash inflows on an on-going basis, the business will eventually run out of cash,

• Cash is the lifeblood of a business and without it the business will eventually die.

Which of the following is not a category of cash flows required to be shown on the statement of cash flows?

• Cash flows from operating activities

• Cash flows from financing activities

• Cash flows from taxation

• Cash flows from investing activities

Which of the following is categorized as a cash flow from investing activities?

• Increase in inventory

• Proceeds of a loan

• Proceeds from sale of PPE

• Dividends paid

Which of the following would reduce the cash balances of a business and not reduce the profit?

• Distribution costs

• Dividends paid

• Interest paid

• Wages paid

Which of the following reduces the cash balances of a business?

• Cash inflow from interest income

• Cash inflow from dividends income

• Cash outflow to acquire fixed assets

• All of the above

Which of the following is a cash flow from a financing activity?

• Cash payments to acquire intangible assets

• Cash receipts from sale of tangible assets

• Cash proceeds from bank loans

• Cash payments to acquire PPE

Which of the following is not a cash outflow for the business?

• Depreciation

• Dividends

• Interest payment

• Taxes