Page 181 - DMGT403_ACCOUNTING_FOR_MANAGERS

Accounting for Managers

Notes 12. Which of the following is not a part to the Statement of Cash Flows (or Cash Flow
Statement)?
(a) Operating Activities

(b) Investors' Activities
(c) Financing Activities
(d) Supplemental Activities.
13. Which of the following is not included under operating activities?
(a) Receipts from income
(b) Payment for a new investment
(c) Payment for expenses and employees
(d) Funding of debtors.

14. Which of the following is included under cash outflows?
(a) Buying new assets
(b) Money the business borrows
(c) Proceeds from selling an investment
(d) None of these.
15. Which of the following is not judged about by the cash flow statements?
(a) Profitability

(b) Financial condition
(c) Financial management
(d) Movement of fund

8.9 Review Questions

1. The comparative Balance Sheets of M/s Ram Brothers for the two years were as follows:

Liabilities Mar, 31 Assets Mar, 31
2008 2009 2008 2009
Capital 3,00,000 3,50,000 Land &Building 2,20,000 3,00,000
Loan from Bank 3,20,000 2,00,000 Machinery 4,00,000 2,80,000
Creditors 1,80,000 2,00,000 Stock 1,00,000 90.000
Bills payable 1,00,000 80,000 Debtors 1,40,000 1,60,000
Loan from SBI 50,000 Cash 40,000 50,000
9,00,000 8,80,000 9,00,000 8,80,000

Additional Information:
(a) Net profit for the year 2009 amounted to 1,20,000.

(b) During the year a machine costing 50,000 (accumulated depreciation 20,000) was
sold for 26,000. The provision for depreciation against machinery as on 31 Mar.,
2008 was 1,00,000 and 31st Mar., 2009 1,70,000.
You are required to prepare a cash flow statement.

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