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Question Practice

Why is it important to classify cash flows into operating, investing, and financing activities?

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

Why is it important to classif...

Single Answer MCQ
Q-00082918

Why is it important to classify cash flows into operating, investing, and financing activities?

1

To reduce accounting complexity.

2

To understand the source and use of cash.

3

To ensure compliance with tax laws.

4

To improve revenue recognition.

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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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