Financial Statements

Cash Flow

Medium

Separate disclosure of cash flow arising from Financial Activities is important because

It helps in identifying the investment activities.

It helps in gaining in investing activities.

It helps in making investing decision.

It is useful in predicting claims on future cash flow by providers of funds to the enterprise.

✅ Correct Option: 4

As per AS-3, the separate disclosure of cash flows from financing activities is important because it is useful in predicting claims on future cash flows by providers of funds (lenders and shareholders) to the enterprise. It shows how the entity has raised and repaid capital.

2023: 11 June Shift 3

Cave Ltd. made a profit of Rs. 1,50,000 after charging depreciation of Rs. 30,000 on assets and a transfer to general reserve of Rs. 30,000. The Goodwill amortised was Rs. 9,000 and gain on sale of machinery was Rs. 5,000. Operating profit before working capital changes will be :

2023: 11 June Shift 3

Calculate cash flow from financing Activities of X Ltd. which is a financing company.

Issue of shares Rs. 1,00,000

Issue of Bonus shares Rs. 50,000

Dividend paid Rs. 10,000

Interest paid Rs. 5,000

2022: 15 July Shift 2

Amount of Security Premium Reserve will be shown in

2022: 30 Aug Shift 2

Match List I with List II

	LIST I		LIST II
A.	Cash Equivalents	I.	Interim Dividend paid
B.	Financing Activities	II.	Selling & Distribution expenses paid
C.	Operating Activities	III.	Marketable securities
D.	Investing Activities	IV.	Dividend received on Shares held as investment

Choose the correct answer from the options given below:

2024

Identify the correct sequence of the following steps involved in calculating cash flows from operating activities of a company:

2025: 13 May Shift 2

Arrange As Appear In Cash Flow Statement-

(A) Investing activities

(B) Operating activities

(D) Cash and cash equivalents

Choose the correct answer from the options given below:

Separate disclosure of cash flow arising from Financial Activities is important because

Solution

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