Tag: commercial studies

Questions Related to commercial studies

Purposes of an accounting system includes all of the following except _____________.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. interpret and record the effect of business transactions

  2. classify the effects of transactions to facilitate the preparation of reports

  3. summarize and communicate information to decision makers

  4. deciding the line of business for an entity

Show answer
Correct Option: D

Cash and Cash Equivalents used is known as _________ of Cash.

commercial studies budgeting distinction between funds flow and cash flow statements preparation of cash flow statement statement of changes in financial position

  1. inflow

  2. outflow

  3. receiving

  4. none of these

Show answer
Correct Option: B

Cash Flow Statement ignores fundamental accounting __________ .

commercial studies budgeting distinction between funds flow and cash flow statements preparation of cash flow statement statement of changes in financial position

  1. concept

  2. principle

  3. policy

  4. all of the above

Show answer
Correct Option: A

Cash comprises of ________________.

commercial studies budgeting distinction between funds flow and cash flow statements preparation of cash flow statement statement of changes in financial position

  1. Cash on hand

  2. Demand deposits with banks.

  3. Both (a) and (b)

  4. None of the above

Show answer
Correct Option: C
Explanation:

Cash is money in the form of currency, which includes all bills, coins, and currency notes. A demand deposit is a type of account from which funds may be withdrawn at any time without having to notify the institution. 


Examples of demand deposit accounts include checking accounts and savings accounts.

Which of the following is not the example of cash equivalents?

commercial studies budgeting distinction between funds flow and cash flow statements preparation of cash flow statement statement of changes in financial position

  1. Treasury bills

  2. Commercial papers

  3. Debtors

  4. Money market funds

Show answer
Correct Option: C

Cash Flow Statement facilitates to determine Cash Flow from ____________ activities.

commercial studies budgeting distinction between funds flow and cash flow statements preparation of cash flow statement statement of changes in financial position

  1. operating

  2. investing

  3. financing

  4. all of the above

Show answer
Correct Option: D

Financing Activities are the activities that result in changes in the size and composition of the owner's capital and borrowings of the company.

commercial studies budgeting distinction between funds flow and cash flow statements preparation of cash flow statement statement of changes in financial position

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

Financing activities are activities that result in changes in the size and composition of the owners' capital and borrowings of the enterprise. e.g., cash proceeds from issue of equity shares, debentures, raising long-term loans, repayment of bank loans, etc. Cash proceeds from issuing shares (equity / preference).

Cash Equivalents are short-term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in value.

commercial studies budgeting distinction between funds flow and cash flow statements preparation of cash flow statement statement of changes in financial position

  1. True

  2. False

Show answer
Correct Option: A

Which of the following are included in investing activities?

commercial studies budgeting distinction between funds flow and cash flow statements preparation of cash flow statement statement of changes in financial position

  1. Sale of machnery.

  2. Purchase of furniture

  3. Loans and advances to third parties.

  4. All of the above

Show answer
Correct Option: D

Cash received from sale of goods is not an operating activity.

commercial studies budgeting distinction between funds flow and cash flow statements preparation of cash flow statement statement of changes in financial position

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

Some common operating activities include cash receipts from goods sold, payments to employees, taxes, and payments to suppliers.This means that the issuance of stock or bonds by a company are not counted as operating activities.