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CF
Question Practice

What is the purpose of classifying cash flows into operating, investing, and financing activities?

Attempt the question, check the explanation, and continue with similar questions to build confidence before exams.

MCQ_SA
CBSE
Class 12
Accountancy
Accountancy Part - II
Cash Flow Statement
Question Bank

What is the purpose of classif...

Single Answer MCQ
Q-00082999

What is the purpose of classifying cash flows into operating, investing, and financing activities?

1

To comply with tax regulations

2

To assess the company's liquidity

3

To help users understand financial position and cash flow impact

4

To evaluate employee performance

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Q1.

What is the primary objective of a cash flow statement?

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Q2.

Which activity would be classified under investing activities in a cash flow statement?

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Q3.

How does a cash flow statement assist users in financial analysis?

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Q4.

What is one benefit of using a cash flow statement with other financial statements?

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