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ms4003_2025T1_Q1_NA.pdf

Financial Forensics · Quiz 1 · Jan 2025

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Questions and published explanations below are available without starting a test. Some questions may not have a published solution yet.

Question 294 MCQ · 1.0 marks

Total cash inflow in the operating section of the statement of cash flows should include which of the following?
  1. Cash received from customers at the point of sale
  2. Cash collections from customer accounts receivable
  3. Cash received in advance of revenue recognition (unearned revenue)
  4. All of these

A published solution is not available for this question yet.

Question 295 MCQ · 1.0 marks

Which of the following would not appear in the investing section of the statement of cash flows?
  1. Purchase of land for a new office building
  2. Interest and dividend received
  3. Purchase of inventory
  4. Sale of obsolete equipment used in the factory

A published solution is not available for this question yet.

Question 296 MCQ · 1.0 marks

Which of the following is considered as a financing activity while preparing the statement of cash flows?
  1. Dividends Received and Interest Paid
  2. Dividends Received and Interest Received
  3. Dividends Paid and Interest Received
  4. Dividends Paid and Interest Paid

A published solution is not available for this question yet.

Question 297 MCQ · 1.0 marks

ABC Limited, an FMCG company specializing in cosmetics, is currently facing a lawsuit from a consumer demanding INR 5,00,000 for allegedly misleading consumers with misinformation. With the verdict still pending, how should the company reflect this situation in the balance sheet and P&L statement for the quarter in which the lawsuit was filed?
  1. Cash balance would reduce by INR 5,00,000 to account for the law suit.
  2. Expenses would increase by INR 5,00,000
  3. No impact in balance sheet and P&L statement
  4. Cash balance would reduce by INR 5,00,000 and expenses would increase by the same amount to account for the law suit.

A published solution is not available for this question yet.

Question 298 MCQ · 1.0 marks

On January 1, 2017. XYZ Company started the year with a ₹ 400,000 in Retained Earnings, a ₹ 150,000 balance in Common Stock, and a ₹ 300,000 balance in Additional Paid-in Capital. During 2017, the company earned net income of ₹ 40,000, declared a dividend of ₹ 10,000, and issued 900 additional shares of stock (par value of ₹ 1 per share) for ₹ 10,000. What is total stockholders' equity on December 31, 2017?
  1. ₹890,000
  2. ₹900,000
  3. ₹880,000
  4. None of these

A published solution is not available for this question yet.

Question 299 MCQ · 1.0 marks

An amount ₹1,00,000 was withdrawn from bank to finance working capital requirement of the business. The transaction will lead to
  1. Increase in expenditure
  2. Increase in asset
  3. No effect on the balance sheet total
  4. Increase in liability

A published solution is not available for this question yet.

Question 300 MCQ · 1.0 marks

ABC incorporation rented out an office space for running its business. It entered into an agreement with the owner of the space on 1\(^{st}\) January 2025 and agreed to pay a monthly rent of INR 1,00,000, payable on the 1\(^{st}\) of every month starting January 1\(^{st}\). How would this transaction be recorded in the balance sheet and P&L statement prepared on 1\(^{st}\) January 2025?
  1. No impact on balance sheet and cashflow statement.
  2. Cash balance reduces by INR 1,00,000 and Expenses increases by the same amount
  3. Cash balance reduces by INR 1,00,000 and create a new line item in asset section titled “Right to use office space” as INR 1,00,000
  4. Cash balance reduces by INR 1,00,000

A published solution is not available for this question yet.

Question 301 MCQ · 1.0 marks

Which of the following regarding retained earnings is false?
  1. Retained earnings is increased by net income and decreased by a net loss
  2. Retained earnings is a component of stockholders' equity on the balance sheet
  3. Retained earnings is reported on the asset side of the balance sheet
  4. Retained earnings represents earnings not distributed to stockholders in the form of dividends

A published solution is not available for this question yet.

Question 302 NAT · 1.0 marks

A company purchased machinery worth ₹ 7,50,000 on January 2nd from a vendor. The company paid 50% of the amount in cash, and the remaining 50% was taken on credit from the vendor for 30 days. How many changes must be made to the balance sheet to account for this transaction?

    A published solution is not available for this question yet.

    Question 303 NAT · 1.5 marks

    [[IMAGE:ed2a5ce13e43b205_5_0]]
    Source diagram or notation

      A published solution is not available for this question yet.

      Question 304 NAT · 1.5 marks

      [[IMAGE:ed2a5ce13e43b205_5_1]] Based on the above data, answer the given subquestions.
      What is the net income of the company in 2024?
      Source diagram or notation

        A published solution is not available for this question yet.

        Question 305 NAT · 1.0 marks

        [[IMAGE:ed2a5ce13e43b205_5_1]] Based on the above data, answer the given subquestions.
        What is the ending equity of the company?
        Source diagram or notation

          A published solution is not available for this question yet.

          Question 306 NAT · 2.0 marks

          [[IMAGE:ed2a5ce13e43b205_5_1]] Based on the above data, answer the given subquestions.
          What is the total assets of the company as of Dec 31\(^{st}\), 2024?
          Source diagram or notation

            A published solution is not available for this question yet.

            Question 307 MCQ · 1.25 marks

            [[IMAGE:ed2a5ce13e43b205_7_2]] Based on the above data, answer the given subquestions.
            What is the cash flow from operating activities?
            Source diagram or notation
            1. ₹ 37,164
            2. ₹ 42,299
            3. ₹ (42,299)
            4. ₹ (37,164)

            A published solution is not available for this question yet.

            Question 308 MCQ · 1.25 marks

            [[IMAGE:ed2a5ce13e43b205_7_2]] Based on the above data, answer the given subquestions.
            What is the cash flow from financing activities?
            Source diagram or notation
            1. ₹ 1,128
            2. ₹ 1082
            3. ₹ (805)
            4. ₹ 715

            A published solution is not available for this question yet.

            Question 309 MCQ · 1.25 marks

            [[IMAGE:ed2a5ce13e43b205_7_2]] Based on the above data, answer the given subquestions.
            What is the cash flow from investing activities?
            Source diagram or notation
            1. ₹ 7,113
            2. ₹ 6,042
            3. ₹ 6,261
            4. ₹ 852

            A published solution is not available for this question yet.

            Question 310 MCQ · 1.25 marks

            [[IMAGE:ed2a5ce13e43b205_7_2]] Based on the above data, answer the given subquestions.
            What is the total cash flow of the company at the end of the year?
            Source diagram or notation
            1. ₹ 43,866
            2. ₹ 51,194
            3. ₹ (34,910)
            4. ₹ 43,921

            A published solution is not available for this question yet.