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

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Cash flow from operating activities includes:

A. Cash received from customers

B. Issue of shares

C. Repayment of loan

D. Sale of machinery

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

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In a bank reconciliation, a 'Dishonoured cheque' recorded in passbook but not in cash book will: (starting with cash book Dr.)

A. Double entry

B. Be added

C. Be deducted

D. No effect

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Correct Answer: Option C

Explanation:
Dishonoured cheque reduces bank balance as per passbook, so to reconcile from cash book to passbook, deduct.

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

Question #2

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The 'Income Tax Refund' received is:

A. Liability

B. Capital receipt

C. Revenue receipt

D. Deferred revenue

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Correct Answer: Option C

Explanation:
Income tax refund is a revenue receipt as it pertains to business profits.

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

Question #3

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The 'Sufficient Appropriate Audit Evidence' means:

A. Only quality

B. Any evidence

C. Only quantity

D. Quantity (sufficiency) and quality (appropriateness - relevance and reliability) of evidence

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Correct Answer: Option D

Explanation:
Sufficient relates to quantity, appropriate to quality.

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

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