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1. What is the primary purpose of a cash flow statement?
To show profitability · To provide information about cash inflows and outflows · To summarize financial position · To report changes in equity
2. Which of the following is classified as a cash flow from operating activities?
Sale of fixed assets · Issuance of shares · Cash received from customers · Loan taken from a bank
3. In the cash flow statement, which method can be used to prepare cash flows from operating activities?
Direct method only · Indirect method only · Both direct and indirect methods · Neither method
4. Which of the following is NOT a component of cash flow from investing activities?
Purchase of machinery · Sale of investments · Payment of dividends · Acquisition of land
5. What does a negative cash flow from financing activities indicate?
Increase in borrowings · Repayment of loans · Increase in equity capital · Sale of shares
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