DK Goel Accountancy Class 12 Solutions Vol 1 Chapter 6 – Cash Flow Statement

Dk Goel Accountancy Class 12 Solutions Vol 1 Chapter 6 are provided in this article. Chapter 6 is Cash Flow Statement. This book of DK Goel Accountancy is considered to be the most helpful study material for the Students pursuing their CBSE class 12.

These solutions for class 12 are created by the experts of KopyKitab. Also, these solutions are created by keeping in mind the latest syllabus of the CBSE Class 12 syllabus. These solutions will be providing you immense knowledge about how the exam questions will be provided.

The DK Goel Class 12 Chapter 6 Cash Flow Statement furnishes a wide range of solutions that certainly supports the students to understand, analyze and solve them.  

Download Dk Goel Accountancy Class 12 Solutions Vol 1 Chapter 6 Cash Flow Statement PDF 

In this section, the students will get ample questions and their solutions for DK Goel Accountancy Class 12 Solutions Vol 1 Chapter 6. The students can download the pdf by clicking over the link providing below.

DK Goel Accountancy Class 12 Solutions Vol 1 Chapter 6

These questions and solutions of DK Goel Accountancy Class 12 Solutions Vol 1 Chapter 6 will be very helpful for the students for their board exams. While preparing for the board exam a student must have proper knowledge about the topics for which they are preparing.  

Detailed Topics for Dk Goel Accountancy Class 12 Solutions Vol 1 Chapter 6 Cash Flow Statement 

A Cash Flow Statement is a statement showing the changes in the financial position of a business concern during different intervals of time in terms of cash and cash equivalents.

However, according to the revised accounting standard-3, all listed companies must prepare and present a cash flow statement along with other financial statements on annual basis.  

This chapter further includes:-  

1. Cash Flows: these are the inflows and outflows of cash and cash equivalents.  
2. The objective of the cash flow statement  
3. Limitations of cash flow statement  
4. Classification of business activities accounting standard-3  
5. Cash flow from operating activities: Cash inflows, cash outflows- for the finance company, insurance company, real estate 
6. Cash flow from investing activities: cash inflows and cash outflows  
7. Cash flow from financing activities: cash inflows and cash outflows  
8. Format of cash statement: the indirect method 

Dk Goel Accountancy Class 12 Solutions Vol 1 Chapter 6 Cash Flow Statement Sample Questions  

In this section you will get DK Goel Accountancy Class 12 Solutions Vol 1 Chapter 6 sample questions and solutions. 

Q1. Identify the following transactions as belonging to (I) operating, (ii) Financing, (iii) investing, (iv) Cash Equivalents  

1. Interest paid  
2. Interest received  
3. Interest received on investment by a bank  
4. Interest received in investment by a manufacturing company  
5. Dividend received  
6. Dividend received by a mutual fund company  
7. Purchase of investment  
8. Purchases of investment by a finance company  
9. Purchase of investment by a non-financing company  
10. Bank Balance  
11. Short term deposit in banks  
12. Bank overdraft  
13. Marketable securities  

Solution:-  

1. Financing  
2. Investing  
3. Operating  
4. Investing  
5. Investing  
6. Operating  
7. Investing  
8. Operating  
9. Investing  
10. Financing  
11. Cash equivalents  
12. Financing  
13. Cash equivalents  

Bank, investment companies and Mutual funds are financing companies. All trading companies, manufacturing companies, and other business establishments are non-financing companies.  

Q2. What are Inflows and Outflows of cash?

Answer: The inflows and outflows of cash are

Inflows of Cash: All transactions that lead to an increase in cash and cash equivalents are classified as inflow of cash. Cash inflows are cash sales, cash received from debtors, cash received from commission and fees, royalty, sale of securities, rent received. 

Outflows of Cash: All the transactions that lead to a decrease in cash and cash equivalents are classified as outflows of cash. cash outflows are cash purchases, payment to creditors, cash operating expenses, payment of wages, cash paid for interest, rent paid, premiums and claims paid.

Q3. What are the limitations of cash flow statement?

Answer. The limitations of Cash flow statement are:

1. It ignores non cash transactions
2.  it ignores the accrual concept
3. it is historical in nature
4. it does not substitute for an income statement
5. it is not suitable for judging liquidity of the enterprise.