Skip to content

CA Intermediate · Advanced Accounting · AS 3 Cash Flow Statement

Yamuna Retail Ltd. had cash and cash equivalents of ₹2,40,000 at the start of the year. During the year, net cash from operating activities was ₹5,10,000, net cash used in investing activities was ₹3,70,000 and net cash used in financing activities was ₹1,25,000. What is the closing balance of cash and cash equivalents?

The closing cash and cash equivalents are ₹2,55,000. The three activities net to an increase of ₹15,000 (5,10,000 less 3,70,000 less 1,25,000), which is added to the opening balance of ₹2,40,000.

  1. A₹2,55,000Correct
  2. B₹2,25,000
  3. C₹1,15,000
  4. D₹2,95,000

Explanation

Net change = 5,10,000 - 3,70,000 - 1,25,000 = +15,000. Closing = 2,40,000 + 15,000 = 2,55,000. Option B wrongly subtracts the net change from the opening balance.

Did you get it right without looking?

One question tells you little. A timed set on AS 3 Cash Flow Statement shows your real accuracy, how long you take and where you lose marks.

Practise AS 3 Cash Flow StatementFree diagnostic mock

More AS 3 Cash Flow Statement questions