Question : Why non-cash transactions are ignored while preparing a Cash Flow Statement?
Option 1: Because non-cash transactions do not affect Cash
Option 2: Because non-cash transactions affected cash
Option 3: Because non-cash transactions affected financing activities
Option 4: Because non- cash transactions affected investing activities
Correct Answer: Because non-cash transactions do not affect Cash
Solution : Answer = Because non-cash transactions do not affect Cash
Non-cash transactions are ignored in the Cash Flow Statement because they do not directly involve the inflow or outflow of cash. Instead, they represent transactions that may impact other financial activities but do not affect the cash position of the entity. Hence, the correct option is 1.
Question : If a machine whose original cost is Rs.40,000 having accumulated depreciation Rs.12,000, were sold for Rs.34,000 then while preparing Cash Flow Statement its effect on cash flow will be :
Question : The cash flow statement begins with :
Question : Under which type of activity will you classify 'Proceeds from Sale of Patents' while preparing Cash Flow Statement?
Question : Under which type of activity will you classify Income Tax paid while preparing the Cash Flow Statement?
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