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CBSE · Class 12 · Accountancy

Cash Flow Statement

Standard difficulty · 20 questions · 40 marks · Time: 44 minutes

Name: Date: Score: ____ / 40

Show your working for Sections B and C. Answers are on the last page — try every question first!

Section A — Choose the correct answer8 × 1 = 8 marks
1.
The cash flow statement is prepared under:
  1. AS 10
  2. AS 26
  3. AS 1
  4. AS 3 (Revised)
2.
For a manufacturing company, “raising a long-term bank loan” is a cash flow from:
  1. operating activity
  2. investing activity
  3. financing activity
  4. not a cash flow (a cash equivalent)
3.
Which of these is NOT a cash equivalent?
  1. a bank deposit maturing within three months
  2. commercial paper maturing within three months
  3. treasury bills maturing within three months
  4. equity shares of another company
4.
A company’s net profit before tax is ₹3,97,000. Depreciation is ₹50,000, interest on debentures (a finance cost) is ₹8,000 and there is a profit on sale of machinery ₹6,000. What is the operating profit before working capital changes?
  1. ₹4,49,000
  2. ₹4,41,000
  3. ₹4,47,000
  4. ₹4,61,000
5.
In finding cash from operating activities: increase in trade receivables ₹39,000, increase in inventories ₹37,000, increase in trade payables ₹33,000. What is the net adjustment to the operating profit?
  1. deduct ₹1,09,000
  2. add ₹1,09,000
  3. add ₹43,000
  4. deduct ₹43,000
6.
Machinery (net) was ₹4,50,000 at the start of the year and ₹5,39,000 at the end. Depreciation for the year was ₹78,000, and machinery of book value ₹43,000 was sold. How much machinery was bought?
  1. ₹89,000
  2. ₹2,10,000
  3. ₹1,67,000
  4. ₹2,88,000
7.
During the year a company issued shares for ₹5,00,000, raised a long-term loan of ₹77,000, repaid an older loan of ₹43,000, paid dividend of ₹16,000 and interest on debentures of ₹38,000. What is the net cash from financing activities?
  1. ₹5,56,000
  2. ₹5,77,000
  3. ₹5,34,000
  4. ₹4,80,000
8.
Cash from operating activities is ₹2,80,000, from investing activities −₹56,000 and from financing activities ₹34,000. Opening cash and cash equivalents were ₹25,000. What are the closing cash and cash equivalents?
  1. ₹2,83,000
  2. ₹3,95,000
  3. ₹2,58,000
  4. ₹2,15,000
Section B — Short answer8 × 2 = 16 marks
9.
What is a cash flow statement?
10.
Explain each term: (a) indirect method (b) cash flow
11.
Find the cash from operating activities: net profit before tax ₹2,55,000; depreciation ₹49,000; interest on debentures ₹19,000; loss on sale of machinery ₹9,000; decrease in trade receivables ₹14,000; decrease in inventories ₹20,000; increase in trade payables ₹19,000; income tax paid ₹5,000.
12.
Machinery with a book value of ₹51,000 was sold at a loss of ₹4,000. Find the cash received from the sale, and say under which activity it is shown.
13.
The surplus (balance in the Statement of Profit and Loss) rose from ₹56,000 to ₹1,17,000. During the year ₹21,000 was transferred to general reserve and a provision for tax of ₹72,000 was made. Find the net profit before tax.
14.
Provision for tax was ₹69,000 at the start of the year and ₹68,000 at the end. A provision of ₹85,000 was made during the year. How much tax was paid?
15.
A company’s opening cash and cash equivalents were ₹65,000, and the net decrease in cash and cash equivalents for the year was ₹5,000. Find the closing cash and cash equivalents.
16.
For a manufacturing company, is each an operating, investing or financing activity? (a) dividend paid to shareholders (b) royalty received
Section C — Word problems4 × 4 = 16 marks
17.
Explain the benefits of a cash flow statement.
18.
Prepare the cash flow from operating activities (indirect method): net profit before tax ₹2,12,000; depreciation ₹68,000; interest on debentures ₹27,000; profit on sale of machinery ₹9,000; increase in trade receivables ₹29,000; decrease in inventories ₹32,000; increase in trade payables ₹6,000; income tax paid ₹46,000.
19.
Machinery (net) was ₹3,70,000 at the start and ₹5,32,000 at the end of the year, after depreciation of ₹77,000. Machinery of book value ₹41,000 was sold at a profit of ₹3,500. Long-term investments of ₹28,000 were bought and interest of ₹8,000 was received on investments. Find the cash flow from investing activities.
20.
A company’s cash from operating activities is ₹38,000. It bought machinery for ₹2,20,000 and sold old machinery for ₹22,000; issued shares for ₹2,00,000, repaid a loan of ₹29,000, paid dividend of ₹10,000 and interest on debentures of ₹2,000. Opening cash and cash equivalents were ₹50,000. Find (a) the cash flow from investing activities (b) from financing activities (c) the net change in cash and cash equivalents (d) the closing cash and cash equivalents.
AmbifulWorksheets
Practice that never repeats
CBSE · Class 12 · Accountancy

Answer key

Cash Flow Statement · AW-12AC-CSF-2026-V1 · For parents — fold back or tear off before handing the sheet to your child.

QAnswerWorking
1(d) AS 3 (Revised)—
2(c) financing activity—
3(d) equity shares of another company—
4(a) ₹4,49,000₹3,97,000 + ₹50,000 + ₹8,000 − ₹6,000
5(d) deduct ₹43,000increase in trade receivables: deduct ₹39,000; increase in inventories: deduct ₹37,000; increase in trade payables: add ₹33,000
6(b) ₹2,10,000₹5,39,000 + ₹78,000 + ₹43,000 − ₹4,50,000
7(d) ₹4,80,000₹5,00,000 + ₹77,000 − ₹43,000 − ₹16,000 − ₹38,000
8(a) ₹2,83,000₹25,000 + ₹2,80,000 − ₹56,000 + ₹34,000
9A statement showing the inflows and outflows of cash and cash equivalents of a period, classified into operating, investing and financing activities.—
10(a) starting from net profit and adjusting for non-cash items and working capital changes (b) an inflow or outflow of cash and cash equivalents—
11₹3,80,000operating profit before working capital changes ₹3,32,000; decrease in trade receivables add ₹14,000, decrease in inventories add ₹20,000, increase in trade payables add ₹19,000; less tax ₹5,000
12₹47,000; investing activity₹51,000 − ₹4,000
13₹1,54,000₹1,17,000 − ₹56,000 + ₹21,000 + ₹72,000
14₹86,000₹69,000 + ₹85,000 − ₹68,000
15₹60,000₹65,000 − ₹5,000
16(a) financing activity (b) operating activity—
17It shows how cash was generated and used, helps judge liquidity and the ability to pay debts and dividends, helps cash planning, and allows comparison between firms.—
18Net profit before tax ₹2,12,000
Add: depreciation ₹68,000, interest on debentures ₹27,000; less profit on sale ₹9,000
Operating profit before working capital changes ₹2,98,000
increase in trade receivables: deduct ₹29,000; decrease in inventories: add ₹32,000; increase in trade payables: add ₹6,000
Cash generated from operations ₹3,07,000; less income tax paid ₹46,000
Cash from operating activities ₹2,61,000		interest is a financing item and the profit or loss on sale an investing one, so both are taken out of operating profit
19Sale of machinery ₹44,500; purchase of machinery (₹2,80,000); purchase of investments (₹28,000); interest received ₹8,000; net cash used in investing activities ₹2,55,500purchase = ₹5,32,000 + ₹77,000 + ₹41,000 − ₹3,70,000; sale = ₹41,000 + ₹3,500
20(a) −₹1,98,000; (b) ₹1,59,000; (c) −₹1,000; (d) ₹49,000(a) ₹22,000 − ₹2,20,000 (b) ₹2,00,000 − ₹29,000 − ₹10,000 − ₹2,000 (c) ₹38,000 + (a) + (b)