Question 1

Which of the following items is required to be presented in a statement of cash flows?

Accepted Answer

A)  Depositing cash on hand in the bank account. 
B)  Payment of dividends through a share investment scheme. 
C)  Proceeds from the issue of debentures. 
D)  Acquisition of an investment in a subsidiary for consideration consisting of an exchange of non-current assets and liabilities. 
A)  Depositing cash on hand in the bank account. 
B)  Payment of dividends through a share investment scheme. 
C)  Proceeds from the issue of debentures. 
D)  Acquisition of an investment in a subsidiary for consideration consisting of an exchange of non-current assets and liabilities. C

Question 2

According to AASB 107/IAS 7 Statement of Cash Flows, which of the following items does not fall within the definition of cash?

Accepted Answer

A)  Accounts receivable. 
B)  Bank notes and coins. 
C)  Non-bank bills that are readily convertible to cash. 
D)  Deposits on the short-term money market with a term of less than 3 months. 
A)  Accounts receivable. 
B)  Bank notes and coins. 
C)  Non-bank bills that are readily convertible to cash. 
D)  Deposits on the short-term money market with a term of less than 3 months. A

Question 3

During the financial year Marina Limited had sales of $840 000. The opening balance of accounts receivable was $66 000, and the closing balance was $78 000. Bad debts amounting to $8 000 were written off during the period. The cash receipts from customers during the year amounted to:

Accepted Answer

A)  $820 000 
B)  $828 000 
C)  $840 000 
D)  $860 000 
A)  $820 000 
B)  $828 000 
C)  $840 000 
D)  $860 000 A

Question 4

A company reported the following information for a financial year: $\begin{array}{lr}
\text { Profit from ordinary activities before incometax expense } & 264000 \
\text { Income tax expense } & 70000 \
\text { Depreciation expense } & 24000 \
\text { Issue of shares } & 120000 \
\text { Loan made to another company } & 24000 \
\text { Increase in accounts receivable } & 8000 \
\text { Decrease in inventories } & 12000 \
\text { Cash received from loans receivable } & 4000 \
\text { Dividends paid } & 16000
\end{array}$ What is the net cash inflow (outflow) from financing activities?

Accepted Answer

A)  $104 000 net cash inflow. 
B)  $120 000 net cash inflow. 
C)  $124 000 net cash inflow. 
D)  $(16 000) net cash outflow. 
A)  $104 000 net cash inflow. 
B)  $120 000 net cash inflow. 
C)  $124 000 net cash inflow. 
D)  $(16 000) net cash outflow.

Question 5

Financing activities on an entity's statement of cash flows are usually associated with:

Accepted Answer

A)  disposal of non-current assets. 
B)  purchase on shares by the entity. 
C)  sales of goods and services by the entity. 
D)  movements in non-current liabilities and equity. 
A)  disposal of non-current assets. 
B)  purchase on shares by the entity. 
C)  sales of goods and services by the entity. 
D)  movements in non-current liabilities and equity.

Question 6

Which of the following items is classified as a 'financing activity' in the statement of cash flows?

Accepted Answer

A)  cash received from accounts receivable. 
B)  cash payment to purchase debentures of another entity. 
C)  cash payment on redemption of the company's debentures. 
D)  payment of dividends through a dividend reinvestment scheme. 
A)  cash received from accounts receivable. 
B)  cash payment to purchase debentures of another entity. 
C)  cash payment on redemption of the company's debentures. 
D)  payment of dividends through a dividend reinvestment scheme.

Question 7

Which of the following cash flow activities are regarded as investing cash flows?

Accepted Answer

A)  interest paid. 
B)  income taxes paid. 
C)  acquisition of subsidiary net of cash acquired. 
D)  proceeds from issue of debentures. 
A)  interest paid. 
B)  income taxes paid. 
C)  acquisition of subsidiary net of cash acquired. 
D)  proceeds from issue of debentures.

Question 8

Bamboo Co. Limited had a profit after tax of $75 000 for the financial year. Included in this profit was: Depreciation expense of $22 000
Gain on sale of investments of $6 000
Also, accounts receivable increased by $26 000 and inventories decreased by $8 000. The cash flow from operating activities during the year was:

Accepted Answer

A)  $48 000 
B)  $73 000 
C)  $78 000 
D)  $82 000 
A)  $48 000 
B)  $73 000 
C)  $78 000 
D)  $82 000

Question 9

In accordance with AASB 107/IAS 7 Statement of Cash Flows, investing and financing transactions that do not require the use of cash or cash equivalents should be:

Accepted Answer

A)  excluded from a statement of cash flows. 
B)  presented in a statement of cash flows before operating, investing and financing activities. 
C)  presented in a statement of cash flows after the operating, investing and financing activities. 
D)  presented in a statement of cash flows after operating activities and before investing and financing activities. 
A)  excluded from a statement of cash flows. 
B)  presented in a statement of cash flows before operating, investing and financing activities. 
C)  presented in a statement of cash flows after the operating, investing and financing activities. 
D)  presented in a statement of cash flows after operating activities and before investing and financing activities.

Question 10

Bank borrowings are normally classified in the statement of cash flows as:

Accepted Answer

A)  financing activities, except for bank overdrafts that are repayable on demand. 
B)  financing activities, except for bank overdrafts that are repayable on demand and which form an integral part of an entity's cash management. 
C)  operating activities, except for bank overdrafts that are repayable on demand and which form an integral part of an entity's cash management. 
D)  investing activities, except for bank overdrafts that are repayable on demand and which form an integral part of an entity's cash management. 
A)  financing activities, except for bank overdrafts that are repayable on demand. 
B)  financing activities, except for bank overdrafts that are repayable on demand and which form an integral part of an entity's cash management. 
C)  operating activities, except for bank overdrafts that are repayable on demand and which form an integral part of an entity's cash management. 
D)  investing activities, except for bank overdrafts that are repayable on demand and which form an integral part of an entity's cash management.

Question 11

AASB 107/IAS 7 does not require, but encourages, the disclosure of:
I. The name(s) of the entity's bankers.
II. The aggregate amount of cash flows that represent increases in operating capacity separately from those cash flows that are required to maintain operating capacity.
III. The amount of the cash flows arising from the operating, investing and financing activities of each reportable segment.
IV. The amount of undrawn borrowing facilities that may be available for future operating activities and to settle capital commitments, indicating any restrictions on the use of these facilities.

Accepted Answer

A)  I, II and IV. 
B)  I, III and IV. 
C)  II, III and IV. 
D)  I, II and III. 
A)  I, II and IV. 
B)  I, III and IV. 
C)  II, III and IV. 
D)  I, II and III.

Question 12

A company reported the following information for a financial year: $\begin{array}{lr}
\text { Profit from ordinary activities before incometax expense } & 264000 \
\text { Income tax expense } & 70000 \
\text { Depreciation expense } & 24000 \
\text { Issue of shares } & 120000 \
\text { Loan made to another company } & 24000 \
\text { Increase in accounts receivable } & 8000 \
\text { Decrease in inventories } & 12000 \
\text { Cash received from loans receivable } & 4000 \
\text { Dividends paid } & 16000
\end{array}$ What is the net cash inflow from operating activities?

Accepted Answer

A)  $166 000. 
B)  $222 000. 
C)  $236 000. 
D)  $292 000. 
A)  $166 000. 
B)  $222 000. 
C)  $236 000. 
D)  $292 000.

Question 13

A company reported the following information for a financial year: $\begin{array}{lr}
\text { Profit from ordinary activities before incometax expense } & 264000 \
\text { Income tax expense } & 70000 \
\text { Depreciation expense } & 24000 \
\text { Issue of shares } & 120000 \
\text { Loan made to another company } & 24000 \
\text { Increase in accounts receivable } & 8000 \
\text { Decrease in inventories } & 12000 \
\text { Cash received from loans receivable } & 4000 \
\text { Dividends paid } & 16000
\end{array}$ What is the net cash inflow (outflow) from investing activities?

Accepted Answer

A)  $4 000 net cash inflow. 
B)  $24 000 net cash inflow. 
C)  $(20 000) net cash outflow. 
D)  $(24 000) net cash outflow. 
A)  $4 000 net cash inflow. 
B)  $24 000 net cash inflow. 
C)  $(20 000) net cash outflow. 
D)  $(24 000) net cash outflow.

Question 14

Which of the following items must be separately disclosed in the statement of cash flows?
I. Interest paid
II. Dividends paid
III. Interest received
IV. Dividends received
V. Auditor's remuneration paid

Accepted Answer

A)  II, III and IV only. 
B)  I, II and V only. 
C)  II, III, IV and V only. 
D)  I, II, III and IV only. 
A)  II, III and IV only. 
B)  I, II and V only. 
C)  II, III, IV and V only. 
D)  I, II, III and IV only.

Question 15

Which of following is classified as part of 'investing activities' in the statement of cash flows?

Accepted Answer

A)  gain on sale of investments. 
B)  depreciation of non-current assets. 
C)  proceeds from an issue of shares. 
D)  acquisition of non-current assets. 
A)  gain on sale of investments. 
B)  depreciation of non-current assets. 
C)  proceeds from an issue of shares. 
D)  acquisition of non-current assets.

Question 16

Atkins Limited classifies interest paid and interest received as operating activities. Atkins Limited had the following cash flows during the reporting period: Consideration paid to acquire a subsidiary, net of cash acquired $150 000
Dividends paid $30 000
Repayment of borrowings $60 000
Interest paid on borrowings $24 000
Proceeds from sale of plant $100 000
The amount of the cash flows in relation to financing activities of Atkins Limited for the reporting period is:

Accepted Answer

A)  Net cash inflow $90 000. 
B)  Net cash outflow $90 000. 
C)  Net cash inflow $30 000. 
D)  Net cash outflow $30 000. 
A)  Net cash inflow $90 000. 
B)  Net cash outflow $90 000. 
C)  Net cash inflow $30 000. 
D)  Net cash outflow $30 000.

Question 17

For cash flow reporting purposes, operating activities include:

Accepted Answer

A)  acquisition and disposal of investments. 
B)  buying and selling of non-current assets. 
C)  incurring and extinguishing equity and debt. 
D)  those not otherwise classified as financing and investing. 
A)  acquisition and disposal of investments. 
B)  buying and selling of non-current assets. 
C)  incurring and extinguishing equity and debt. 
D)  those not otherwise classified as financing and investing.

Question 18

The components of cash and cash equivalents:

Accepted Answer

A)  must be disclosed and reconciled to amounts reported in the statement of financial position. 
B)  must be disclosed and reconciled to amounts reported in the statement of changes in equity. 
C)  may be disclosed at the option of the entity and reconciled to amounts reported in the statement of financial position. 
D)  must be disclosed and reconciled to amounts reported in the statement of profit or loss and other comprehensive income. 
A)  must be disclosed and reconciled to amounts reported in the statement of financial position. 
B)  must be disclosed and reconciled to amounts reported in the statement of changes in equity. 
C)  may be disclosed at the option of the entity and reconciled to amounts reported in the statement of financial position. 
D)  must be disclosed and reconciled to amounts reported in the statement of profit or loss and other comprehensive income.

Question 19

Investing activities are those relating to:

Accepted Answer

A)  the acquisition or disposal of non-current assets. 
B)  changing the size or financial structure of an entity. 
C)  altering the composition of the debt of an organisation. 
D)  restructuring the working capital components of a business. 
A)  the acquisition or disposal of non-current assets. 
B)  changing the size or financial structure of an entity. 
C)  altering the composition of the debt of an organisation. 
D)  restructuring the working capital components of a business.

Question 20

The basis of measurement used in the statement of cash flows is:

Accepted Answer

A)  accrual. 
B)  current value. 
C)  net present value. 
D)  cash and cash equivalents. 
A)  accrual. 
B)  current value. 
C)  net present value. 
D)  cash and cash equivalents.

Exam 17: Statement of Cash Flows

Which of the following items is required to be presented in a statement of cash flows?

According to AASB 107/IAS 7 Statement of Cash Flows, which of the following items does not fall within the definition of cash?

During the financial year Marina Limited had sales of $840 000. The opening balance of accounts receivable was $66 000, and the closing balance was $78 000. Bad debts amounting to $8 000 were written off during the period. The cash receipts from customers during the year amounted to:

Financing activities on an entity's statement of cash flows are usually associated with:

Which of the following items is classified as a 'financing activity' in the statement of cash flows?

Which of the following cash flow activities are regarded as investing cash flows?

In accordance with AASB 107/IAS 7 Statement of Cash Flows, investing and financing transactions that do not require the use of cash or cash equivalents should be:

Bank borrowings are normally classified in the statement of cash flows as:

Which of the following items must be separately disclosed in the statement of cash flows? I. Interest paid II. Dividends paid III. Interest received IV. Dividends received V. Auditor's remuneration paid

Which of following is classified as part of 'investing activities' in the statement of cash flows?

For cash flow reporting purposes, operating activities include:

The components of cash and cash equivalents:

Investing activities are those relating to:

The basis of measurement used in the statement of cash flows is:

Accounting Regulation and the Conceptual Framework

Application of Accounting Theory

Fair Value Measurement

Inventories

Property, Plant and Equipment

Intangible Assets

Impairment of Assets

Provisions, Contingent Liabilities and Contingent Assets

Employee Benefits

Leases

Financial Instruments

Income Taxes

Share Capital and Reserves

Share Based Payment

Revenue

Presentation of Financial Statements

Accounting Policies and Other Disclosures

Earnings Per Share

Operating Segments

Related Party Disclosures

Sustainability and Corporate Social Responsibility Recording

Foreign Currency Transactions and Forward Exchange Contracts

Translation of Foreign Currency Financial Statements

Business Combinations

Consolidation: Controlled Entities

Consolidation: Wholly Owned Entities

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Joint Arrangements

Insolvency and Liquidation

Accounting for Mineral Resources

Agriculture

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