Question 1

Which of the following bases of accounting measurement recognises revenues when resources are created as part of an organisation's operating activities?

Accepted Answer

A)  Cash 
B)  Financing 
C)  Investing 
D)  Accrual 
A)  Cash 
B)  Financing 
C)  Investing 
D)  Accrual

Question 2

Paid $6000 cash for utilities What was the cash flow from operating activities?

Accepted Answer

A)  $51 000 
B)  $41 000 
C)  $47 000 
D)  $54 000 
A)  $51 000 
B)  $41 000 
C)  $47 000 
D)  $54 000

Question 3

Which of the following would not normally be classified as an operating activity on a cash flow statement?

Accepted Answer

A)  Dividends received 
B)  Interest received 
C)  Dividends paid 
D)  Interest paid 
A)  Dividends received 
B)  Interest received 
C)  Dividends paid 
D)  Interest paid

Question 4

At the end of April, the Blue Water Company sent out statements to customers for April charges totalling $100 000. During April, the company received $85 000 from customers for water bills incurred during March. Blue's employees earned $35 000 during April, but by month end only $30 000 had been paid. Determine the net cash flow from operations and net profit from operations for the month of April.
Net profit Net cash flow

Accepted Answer

A)  $65 000 $85 000 
B)  $70 000 $55 000 
C)  $65 000 $55 000 
D)  $50 000 $70 000 
A)  $65 000 $85 000 
B)  $70 000 $55 000 
C)  $65 000 $55 000 
D)  $50 000 $70 000

Question 5

When calculating the net cash flows from operating activities, an increase in accounts receivables needs to be subtracted from the profit figure.

Accepted Answer

A) True 
 B)False

Question 6

On a cash flow statement, the payment of taxation is considered an operating activity and the payment of dividends is normally classified as a financing activity.

Accepted Answer

A) True 
 B)False

Question 7

How is the statement of cash flows structured?

Accepted Answer

The statement is structured into three s

Question 8

Activities that obtain funds from investors and liabilities to start and sustain a business are called:

Accepted Answer

A)  reporting activities. 
B)  investing activities. 
C)  financing activities. 
D)  operating activities. 
A)  reporting activities. 
B)  investing activities. 
C)  financing activities. 
D)  operating activities.

Question 9

Car Locks Company reported annual sales of $640 000. The following information is also available:   Bad debts written off during the year: $40 000
On a cash flow statement (direct format), what amount would be reported for 'Cash collected from customers' for the year?

Accepted Answer

A)  $510 000 
B)  $630 000 
C)  $610 000 
D)  $720 000 
A)  $510 000 
B)  $630 000 
C)  $610 000 
D)  $720 000

Question 10

Payments to employees would be classified on the cash flow statement as a(n):

Accepted Answer

A)  operating activity. 
B)  investing activity. 
C)  financing activity. 
D)  operating expense. 
A)  operating activity. 
B)  investing activity. 
C)  financing activity. 
D)  operating expense.

Question 11

Briefly describe what information is contained in the Statement of Cash Flows.

Accepted Answer

The cash flows from operating activities

Question 12

Which of the following events is properly classified as an investing activity?

Accepted Answer

A)  Purchase of equipment 
B)  Borrowing money from creditors 
C)  Selling goods to customers 
D)  Running the factory 
A)  Purchase of equipment 
B)  Borrowing money from creditors 
C)  Selling goods to customers 
D)  Running the factory

Question 13

The cash flow statement is designed to report:

Accepted Answer

A)  how the previous period's statement of comprehensive income relates to the current period's statement. 
B)  only the sources and uses of cash during the current period. 
C)  the cash from operating, financing and investing activities of the firm during the current period. 
D)  the effects of the current period's statement of comprehensive income on the current period's balance sheet. 
A)  how the previous period's statement of comprehensive income relates to the current period's statement. 
B)  only the sources and uses of cash during the current period. 
C)  the cash from operating, financing and investing activities of the firm during the current period. 
D)  the effects of the current period's statement of comprehensive income on the current period's balance sheet.

Question 14

Joyce Ltd had cash sales of $80 000 in January. Accounts Receivable decreased by $10 000 during January and there were no credit sales and no bad debts. How much cash was collected from customers in January?

Accepted Answer

A)  $60 000 
B)  $70 000 
C)  $80 000 
D)  $90 000 
A)  $60 000 
B)  $70 000 
C)  $80 000 
D)  $90 000

Question 15

Which of the following has a different effect on net profit than it does on cash flow?

Accepted Answer

A)  Payment for wages 
B)  Cash sale to customer 
C)  Amortisation of a patent 
D)  Payment for rent 
A)  Payment for wages 
B)  Cash sale to customer 
C)  Amortisation of a patent 
D)  Payment for rent

Question 16

Which of the following is an investing activity?

Accepted Answer

A)  Purchase of a patent 
B)  Payment of cash dividends 
C)  Payment of interest 
D)  Purchase of inventory 
A)  Purchase of a patent 
B)  Payment of cash dividends 
C)  Payment of interest 
D)  Purchase of inventory

Question 17

The following information is extracted from a set of financial statements:   The net cash flow from operating activities based only on the above information is:

Accepted Answer

A)  $11 000 
B)  $20 000 
C)  $29 000 
D)  $33 000 
A)  $11 000 
B)  $20 000 
C)  $29 000 
D)  $33 000

Question 18

The receipt of dividends on an investment will be reported in a cash flow statement as:

Accepted Answer

A)  a cash outflow for financing activities. 
B)  a cash inflow for investing activities. 
C)  a cash inflow from operating activities. 
D)  either B or C 
A)  a cash outflow for financing activities. 
B)  a cash inflow for investing activities. 
C)  a cash inflow from operating activities. 
D)  either B or C

Question 19

Dividends received are most commonly classified as an operating activity, but dividends paid are normally classified as a financing activity on the cash flow statement.

Accepted Answer

A) True 
 B)False

Which of the following bases of accounting measurement recognises revenues when resources are created as part of an organisation's operating activities?

Paid $6000 cash for utilities What was the cash flow from operating activities?

Which of the following would not normally be classified as an operating activity on a cash flow statement?

When calculating the net cash flows from operating activities, an increase in accounts receivables needs to be subtracted from the profit figure.

On a cash flow statement, the payment of taxation is considered an operating activity and the payment of dividends is normally classified as a financing activity.

How is the statement of cash flows structured?

Activities that obtain funds from investors and liabilities to start and sustain a business are called:

Car Locks Company reported annual sales of $640 000. The following information is also available: Bad debts written off during the year: $40 000 On a cash flow statement (direct format), what amount would be reported for 'Cash collected from customers' for the year?

Payments to employees would be classified on the cash flow statement as a(n):

Briefly describe what information is contained in the Statement of Cash Flows.

Which of the following events is properly classified as an investing activity?

The cash flow statement is designed to report:

Joyce Ltd had cash sales of $80 000 in January. Accounts Receivable decreased by $10 000 during January and there were no credit sales and no bad debts. How much cash was collected from customers in January?

Which of the following has a different effect on net profit than it does on cash flow?

Which of the following is an investing activity?

The following information is extracted from a set of financial statements: The net cash flow from operating activities based only on the above information is:

The receipt of dividends on an investment will be reported in a cash flow statement as:

Dividends received are most commonly classified as an operating activity, but dividends paid are normally classified as a financing activity on the cash flow statement.

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance and the Worksheet

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters

Exam 7: Presentation of Cash Flows

Which of the following bases of accounting measurement recognises revenues when resources are created as part of an organisation's operating activities?

Paid $6000 cash for utilities What was the cash flow from operating activities?

Which of the following would not normally be classified as an operating activity on a cash flow statement?

When calculating the net cash flows from operating activities, an increase in accounts receivables needs to be subtracted from the profit figure.

On a cash flow statement, the payment of taxation is considered an operating activity and the payment of dividends is normally classified as a financing activity.

How is the statement of cash flows structured?

Activities that obtain funds from investors and liabilities to start and sustain a business are called:

Car Locks Company reported annual sales of $640 000. The following information is also available: Bad debts written off during the year: $40 000 On a cash flow statement (direct format), what amount would be reported for 'Cash collected from customers' for the year?

Payments to employees would be classified on the cash flow statement as a(n):

Briefly describe what information is contained in the Statement of Cash Flows.

Which of the following events is properly classified as an investing activity?

The cash flow statement is designed to report:

Joyce Ltd had cash sales of $80 000 in January. Accounts Receivable decreased by $10 000 during January and there were no credit sales and no bad debts. How much cash was collected from customers in January?

Which of the following has a different effect on net profit than it does on cash flow?

Which of the following is an investing activity?

The following information is extracted from a set of financial statements: The net cash flow from operating activities based only on the above information is:

The receipt of dividends on an investment will be reported in a cash flow statement as:

Dividends received are most commonly classified as an operating activity, but dividends paid are normally classified as a financing activity on the cash flow statement.

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance and the Worksheet

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters