Correct Answer:
B. Operating, investing and financing
IAS 7 requires cash flows to be classified into operating, investing and financing activities.
November 13, 2026 · Accounting and Finance MCQs, Financial Accounting MCQs
The three categories of activities in a statement of cash flows are:
Related MCQs
Zero-based budgeting (ZBB) requires that:
A.
Last year's budget be increased by inflation
B.
Every expenditure be justified from zero in each budget cycle
C.
Budgets be zero in the first year
D.
No deficit be allowed
Correct answer is:
B. Every expenditure be justified from zero in each budget cycle
Do you agree with this answer?
A proportional (flat) tax:
A.
Charges higher rates on higher incomes
B.
Charges the same percentage rate at all income levels
C.
Charges lower rates on higher incomes
D.
Exempts all incomes
Correct answer is:
B. Charges the same percentage rate at all income levels
Do you agree with this answer?
The quick (acid test) ratio excludes which item from current assets?
A.
Inventory
B.
Cash
C.
Trade receivables
D.
Short-term investments
Correct answer is:
A. Inventory
Do you agree with this answer?
Under IAS 37, a provision is recognized when:
A.
There is a present obligation from a past event, an outflow is probable and a reliable estimate can be made
B.
A future loss is merely possible
C.
The management plans to spend money someday
D.
The auditor requires it
Correct answer is:
A. There is a present obligation from a past event, an outflow is probable and a reliable estimate can be made
Do you agree with this answer?
Net income is Rs. 60,000 and shareholders' equity is Rs. 400,000. Return on equity (ROE) is:
A.
6.7%
B.
24%
C.
15%
D.
1.5%
Correct answer is:
C. 15%
Do you agree with this answer?
Incremental budgeting means:
A.
Preparing every budget from zero
B.
Adjusting the previous year's budget by a certain percentage or amount
C.
Using only actual expenditure
D.
Ignoring last year's figures
Correct answer is:
B. Adjusting the previous year's budget by a certain percentage or amount
Do you agree with this answer?
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