Cash Flow Statement · Class 12 · CBSE · Commerce Accountancy
In the context of Cash Flow Statements, how should a bank overdraft be treated?
Practice question from Cash Flow Statement (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
medium · MCQ · Q-D976DD
In the context of Cash Flow Statements, how should a bank overdraft be treated?
- A.Operating Activity cash outflow
- B.Financing Activity cash flow
- C.Component of Cash and Cash EquivalentsCorrect answer
- D.Investing Activity cash outflow
Solution
Bank overdrafts are generally considered to be a component of cash and cash equivalents because they form an integral part of an enterprise's cash management, similar to short-term borrowings that are repayable on demand.
More from Cash Flow Statement
- Which of the following transactions is classified as an Operating Activity for a manufacturing company?
- While preparing a Cash Flow Statement as per AS-3 (Revised), how is a cash dividend paid by a non-financial company treated?
- An enterprise purchases machinery worth Rs 5,00,000 by issuing equity shares of the same amount. How will this transaction be recorded in t…
- Which of the following items is added back to Net Profit Before Tax and Extraordinary Items while calculating Cash Flow from Operating Acti…
Practise more Accountancy
Sign up free for adaptive practice on this chapter, with instant feedback and hints on every question.
Start practising freeFree to start · No credit card needed