The 'Statement of Cash Flows' under Ind AS 7 classifies interest and dividend received by a financial institution as: MCQ with Answer and Explanation

The 'Statement of Cash Flows' under Ind AS 7 classifies interest and dividend received by a financial institution as:
A. Financing activities
B. Any of these
C. Operating activities
D. Investing activities
Answer: Option C
Solution (By JKSSB Mock Tests)
For financial institutions, interest and dividend received are operating activities. For others, they are investing.

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Practice More Accountancy and Book Keeping Questions

Question #1
Which of the following is a feature of standard costing?
A. It is a historical cost system
B. It uses predetermined costs for control purposes
C. It ignores variances
D. It is used for external reporting

Correct Answer: Option B


Explanation:
Standard costing uses predetermined (standard) costs to compare with actual costs, allowing for variance analysis and cost control.

Question #2
Which of the following is/are correct regarding the accounting equation? 1. The equation always holds true under the double entry system. 2. Purchase of goods on credit increases assets and liabilities. 3. Payment to creditors decreases assets and increases liabilities. 4. Introduction of capital by the proprietor increases both assets and capital.
A. All of the above
B. 1, 2 and 4
C. 2, 3 and 4
D. 1, 2 and 3

Correct Answer: Option B


Explanation:
Statement 3 is incorrect because payment to creditors decreases both assets (cash/bank) and liabilities (creditors). 1, 2, and 4 are correct.

Question #3
The 'Provision for Bad Debts' is created by:
A. Crediting Cash Account
B. Debiting Debtors Account
C. Debiting Profit & Loss Account and crediting Provision for Bad Debts
D. Debiting Sales Account

Correct Answer: Option C


Explanation:
The adjusting entry: P&L A/c Dr. To Provision for Bad Debts.