6.What is meant by cash equivalents? Financing activity. Ans. View Class 3 September 12 2019 (1).pdf from MB 338 at Skidmore College. (v)Cash flow statement is not a substitute for income statement. Ans. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 12 Comparative Statements. 2020-21. Ans. Investing activity. Set yourself up for success The cash flow statement—along with the balance sheet and income statement—is one of the 3 key financial statements used to … Solved Cash Flow Statements with Balance Sheet (vertical) and Notes to Accounts - Cbse Class 12 Accountancy Project Ans. Cash flow statement 17. For an Insurance Company (All India 2010) (v) Cash flow statement is not a substitute for income statement. Ans. Cash flow statement is a statement showing the changes in financial position of a business concern during different intervals of time in terms of cash and cash equivalents. myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. TS Grewal Solutions for Class 12 is considered to be the most helpful study resource for the students pursuing their Class 12. 4.State the purpose or objective of preparing a cash flow statement. Ans. ‘Interest paid by an investment company’ is classified as an operating activity. Two investing activities which result into outflow of cash are: (Delhi 2011; hots) Rs 18,000 depreciation was charged on equipment. (iii)Helpful in formulation of business policies. (iii) Provision for taxation Rs 1,60,000. 2.Why is separate disclosure of cash flow from investing activities important while preparing cash flow statement? (iv)Assists in preparation of cash budget. Chapter 14 Cash Flow Statement. The cash flow statement is a standard financial statement used along with the balance sheet and income statement. Ans.Two investing activities that result into inflow of cash are: Ans. Included in fixed assets was a piece of machinery costing Rs 70,000 on which depreciation charged was Rs 40,000 and it was sold for Rs 30,000. Additional Information (ii)A piece of machinery included in fixed assets costing Rs 20,000 on which depreciation charged was Rs 8,000, was sold for Rs 10,000. (All India 2011; Delhi 2011 C) This information is useful in providing users of financial statements with a (v) Used for assessment of cash flow from various activities, viz operating, investing and financing activities. Ans.The two financing activities that result into inflow of cash are: (i)Based on historical cost principle. (Delhi 2009; All India 2009) Ans. (iii) A cash flow statement is also prepared to determine the liquidity position of the organisation. (All India 2013) (Delhi 2012; Modified) Two financing activities that result into outflow of cash are: ‘Cash flow’ implies inflow and outflow of cash and cash equivalents. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 15 Cash Flow Statement. Financial instruments 13. A Cash flow statement shows inflow and outflow of cash and cash equivalents from various activities of a company during a specific period. ... 2019 . 39.When is dividend received considered as an operating activity? (ii)An interim dividend Rs 7,000 has been paid to the shareholders during the year. There chapter wise Practice Questions with complete solutions are available for download in myCBSEguide website and mobile app. (i)During the year, machine costing Rs 80,000 was sold for Rs 50,000. Cash Flow from Operating Activities Operating activities are the principal revenue producing activities of the enterprise and other activities that are not investing or financing activities. 7.State the meaning of cash flow statement. iv. ... CBSE Class 12-commerce Accountancy Cash Flow Statements. Annual cash flow by MarketWatch. Associates and joint ventures 15. (Delhi 2010) 50.State whether the ‘purchase of goods on credit’ will result into inflow, outflow or no flow Of cash. Cash flow from investing activities are exhibited as follows: Not a substitute for Balance Sheet: Cash flow statement do not show the financial position of the enterprise and therefore, cannot be used as a substitute for Balance Sheet. (Delhi 2010) cash flow statement to assess the impact of these activities on the financial position of an enterprise and also on its cash and cash equivalents. 1. the fourth general-purpose financial statement and summarizes how changes in balance sheet accounts affect the cash account during the accounting period (All India 2008) Cash equivalents mean short-term highly liquid investments that are readily convertible into known amount of cash and which are subjected to an insignificant risk of change in value. Ans. Commission and royalty received is an operating activity. (Delhi 2013; hots) No flow of cash as final dividend is only declared, not yet paid. Ans. Ans. Cash Equivalents Cash equivalents are ‘short-term highly liquid investments that are readily convertible into known amount of cash and which are subjected to an insignificant risk of change in value’. 2020-21. (i)Depreciation charged on fixed assets for the year 2009-2010 was Rs 20,000. 7. 4.Limitations of Cash Flow Statement (i)Useful in short-term financial planning. 6 Marks Questions These solutions for CBSE Class 12 are outlined keeping in mind the current CBSE syllabus, hence possessing a great chance of appearing in the board examinations. Ans. (iv) Assists in preparation of cash budget. Operating activity is the principal revenue producing activity of an enterprise whereas, financing activity are those activities which change the size and composition of owner’s equity and borrowings of an enterprise. It shows net income of the firm. IAS 7 requires an entity to present a statement of cash flows as an integral part of its primary financial statements. 18.Under which type of activity will you classify ‘proceeds from sale of patents’ while preparing cash flow statement? The Central Board of Secondary Education (CBSE) is has scheduled to conduct class 12 Commerce exams from March 6, 2019. NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12. Earnings per share 16. Similar to a checking account statement, the cash flow statement shows … Cash inflow, because cash comes in due to interest received on debentures. (All India 2014,2011; Delhi 2014,2011 c) of accounting whereas cash flow statement is prepared on cash basis. Pricing. Additional Information 61.From the following balance sheet, prepare a cash flow statement as per AS-3 (Revised) Additional Information Additional Information There is no flow of cash because purchase of goods on credit will not affect cash. 40.State why cash flow statement is not a substitute for income statement? (i)Depreciation on fixed assets Rs 20,000. Cash flow statement was previously known as the flow of Cash statement. Get ready with unlimited notes and study guides! (Delhi 2009c) (iv) Moreover a cash flow statement is prepared to know about the requirenTent of cash in future. Ans. For a Finance Company Proceeds from sale of investments is an investing activity. Ans. The questions provided in TS Grewal-II (2019) Books are prepared in accordance with CBSE, thus holding higher chances of appearing on CBSE question papers. There will be no flow of cash because depreciation is a non-cash expense. Businesses rely on the statement of cash flows to determine their financial strength. Ans. Particulars. Cash Flow Statement Cash flow statement is a statement showing the changes in financial position of a business concern during different intervals of time in terms of cash and cash equivalents. Ans. Cash flow represents only net cash inflow or outflow of cash. (iii) Ignores non-cash transactions. Accountancy, Business … (All India 2011; Modified) A cash flow statement is a financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources. (i)Depreciation on fixed assets for the year 2009-2010 was Rs 14,700. ‘Dividend received by a financing company’ is classified under operating activity because dividend received is the receipt from principal revenue producing activities of the business. Amazon.com Inc. Transactions with related parties 19. (Compartment 2014) 32.Under which type of activity will you classify ‘proceeds from sale of machinery’ while preparing cash flow statement? Shaalaa has a total of 60 questions with solutions for this chapter in Class 12 Accountancy. 42.State with reason whether charging of depreciation on furniture will result into inflow, outflow or no flow of cash. 20.Under which type of activity will you classify ‘commission and royalty received’while preparing cash flow statement? 60.From the following balance sheet and additional information of Good Wood Co. you are required to prepare the cash flow statement as per AS-3 (Revised). 242 Accountancy : Company Accounts and Analysis of Financial Statements 6.5.1 Cash from Operating Activities Guarantees 20. Operating activity is the principal revenue producing activity of an enterprise whereas, investing activity includes the acquisition and disposal of fixed assets. Kajal Garg. Additional Information Cash Cash comprises of cash in hand and demand deposits with the bank. 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