Cash flow from operating activities includes: MCQ with Answer and Explanation

Question

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Cash flow from operating activities includes:

A. Cash received from customers

B. Issue of shares

C. Sale of machinery

D. Repayment of loan

Answer: Option A

Solution (By JKSSB Mock Tests)

Cash from customers is operating activity. Sale of machinery is investing, issue of shares and loan repayment are financing.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The primary purpose of preparing a Bank Reconciliation Statement (BRS) is to:

A. Identify causes of difference between cash book and pass book balances

B. Correct errors in the ledger

C. Calculate bank interest

D. Determine the net profit

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Correct Answer: Option A

Explanation:
BRS is prepared to reconcile the bank balance as per the cash book with the balance as per the bank statement (pass book).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

When converting Single Entry to Double Entry, the Bills Receivable dishonored will be:

A. Credited to Total Debtors A/c

B. Ignored

C. Debited to Total Debtors A/c

D. Debited to Cash A/c

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Correct Answer: Option C

Explanation:
Dishonor of a bill reinstates the debtor's liability, thus the Total Debtors Account is debited to increase the balance.

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Question #3

The 'Composition Scheme' under GST is not available to:

A. Traders

B. Service providers (except restaurant) with aggregate turnover above ₹50 lakh

C. Restaurants not serving alcohol

D. Manufacturers

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Correct Answer: Option B

Explanation:
Composition scheme for services is restricted to certain categories with turnover up to ₹50 lakh.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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