Question 1

The following item is classified as part of 'investing activities' in the statement of cash flows:

Accepted Answer

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

Question 2

A company reported the following information for a financial year:
 
What is the net cash inflow from operating activities?

Accepted Answer

A)  $45 000. 
B)  $59 000. 
C)  $60 000. 
D)  $61 000. 
A)  $45 000. 
B)  $59 000. 
C)  $60 000. 
D)  $61 000. D

Question 3

During the financial year Sugianto Limited had sales of $42 000. The opening balance of accounts receivable was $9000, and the closing balance was $12 700. Bad debts amounting to $700 were written off during the period. The cash receipts from sales during the year amounted to:

Accepted Answer

A)  $37 600. 
B)  $39 000. 
C)  $38 300. 
D)  $45 700. 
A)  $37 600. 
B)  $39 000. 
C)  $38 300. 
D)  $45 700. A

Question 4

A company reported the following information for a financial year:
 
What is the net cash inflow (outflow) from financing activities?

Accepted Answer

A)  $38 000 net cash inflow. 
B)  $40,000 net cash inflow. 
C)  $42,000 net cash inflow. 
D)  $(2000) net cash outflow. 
A)  $38 000 net cash inflow. 
B)  $40,000 net cash inflow. 
C)  $42,000 net cash inflow. 
D)  $(2000) net cash outflow.

Question 5

The components of cash and cash equivalents:

Accepted Answer

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

Question 6

Cash flows arising from each of the following activities of a financial institution may be reported on a net basis:
I - Cash payments and receipts for the acceptance and repayment of deposits with a fixed maturity date.
II - The placement of deposits with and withdrawal of deposits from other financial institutions.
III - Cash advances and loans made to customers and the repayment of those advances and loans.
IV - Cash receipts and payments for the acceptance and repayment of deposits with no fixed maturity date.

Accepted Answer

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

Question 7

Warner Limited classifies interest paid and interest received a operating activities. Warner Limited had the following cash flows during a reporting period:
Consideration paid to acquire a subsidiary, net of cash acquired $250 000
Dividends paid $65 000
Repayment of borrowings $90 000
Interest paid on borrowings $57 000
Proceeds from sale of plant $215 000
What is the amount of the cash flows in relation to financing activities of Warner Limited for the reporting period?

Accepted Answer

A)  Net cash inflow $155 000. 
B)  Net cash outflow $155 000. 
C)  Net cash inflow $212 000. 
D)  Net cash outflow $212 000. 
A)  Net cash inflow $155 000. 
B)  Net cash outflow $155 000. 
C)  Net cash inflow $212 000. 
D)  Net cash outflow $212 000.

Question 8

A company reported the following information for a financial year:
 
What is the net cash inflow (outflow) from investing activities?

Accepted Answer

A)  $2000 net cash inflow. 
B)  $6000 net cash inflow. 
C)  $(2000) net cash outflow. 
D)  $(4000) net cash outflow. 
A)  $2000 net cash inflow. 
B)  $6000 net cash inflow. 
C)  $(2000) net cash outflow. 
D)  $(4000) net cash outflow.

Question 9

The method of presentation method of operating cash flows that separates gross cash inflows from cash outflows is known as the:

Accepted Answer

A)  equity method. 
B)  direct method. 
C)  set-off method. 
D)  net method. 
A)  equity method. 
B)  direct method. 
C)  set-off method. 
D)  net method.

Question 10

The following information was extracted from the records of Ustinof Limited:
Opening balance of equipment, $360 000
Closing balance of equipment, $400 000
Cost of new equipment, $80 000
Proceeds from sale of equipment, $6000 (Cost $40 000; Carrying amount $10 000)
The total cash flows from investing activities is determined as:

Accepted Answer

A)  $40 000 cash outflow. 
B)  $74 000 cash outflow. 
C)  $76 000 cash outflow. 
D)  $80 000 cash outflow. 
A)  $40 000 cash outflow. 
B)  $74 000 cash outflow. 
C)  $76 000 cash outflow. 
D)  $80 000 cash outflow.

Question 11

An item or transaction will qualify for classification as a cash equivalent:

Accepted Answer

A)  only if it has a remaining term of more than three months but no more than six months. 
B)  only if its term to maturity is no greater than twelve months. 
C)  only if it has a fixed maturity date of greater than twelve months. 
D)  only if it has a maturity of less than three months. 
A)  only if it has a remaining term of more than three months but no more than six months. 
B)  only if its term to maturity is no greater than twelve months. 
C)  only if it has a fixed maturity date of greater than twelve months. 
D)  only if it has a maturity of less than three months.

Question 12

Katsis Limited had the following cash flows during the reporting period:
Purchase of intangibles $20 000
Proceeds from sale of plant $28 000
Receipts from customers $832 000
Payments to suppliers $593 000
Interest received $17 600
Income taxes paid $45 500
The net cash flows from operating activities was:

Accepted Answer

A)  $211 100. 
B)  $219 100. 
C)  $239 100. 
D)  $256 600. 
A)  $211 100. 
B)  $219 100. 
C)  $239 100. 
D)  $256 600.

Question 13

Cash flows arising from investing or financing activities may be reported on a net basis when:

Accepted Answer

A)  cash receipts and payments for items in which the turnover is slow, the amounts are large, and the maturities are short. 
B)  cash receipts and payments for items in which the turnover is quick, the amounts small, and the maturities are short. 
C)  cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are short. 
D)  cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are long-term. 
A)  cash receipts and payments for items in which the turnover is slow, the amounts are large, and the maturities are short. 
B)  cash receipts and payments for items in which the turnover is quick, the amounts small, and the maturities are short. 
C)  cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are short. 
D)  cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are long-term.

Question 14

During the financial year, Cresswell Limited had a cost of sales amounting to $260 000. Opening and ending balances of related accounts were:
 
A discount of $2000 for prompt payment was received. The amount of cash paid for goods purchased during the year was:

Accepted Answer

A)  $259 000. 
B)  $263 000. 
C)  $275 000. 
D)  $279 000. 
A)  $259 000. 
B)  $263 000. 
C)  $275 000. 
D)  $279 000.

Question 15

Items classified as financing activities on an entity's statement of cash flows are usually associated with:

Accepted Answer

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

Question 16

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

Accepted Answer

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

Question 17

The following item is classified as a 'financing activity' in the statement of cash flows:

Accepted Answer

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

Question 18

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

Accepted Answer

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

Question 19

Brett Limited had a profit after tax of $850 000 for the financial year. Included in this profit was:
Depreciation expense of $120 000
Gain on sale of investments of $28 000
Also, accounts receivable increased by $39 000 and inventories decreased by $12 000. The cash flow from operating activities during the year was:

Accepted Answer

A)  $731 000. 
B)  $785 000. 
C)  $915 000. 
D)  $969 000. 
A)  $731 000. 
B)  $785 000. 
C)  $915 000. 
D)  $969 000.

Question 20

The following cash flow activities are regarded as investing cash flows:

Accepted Answer

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

Exam 17: Statement of Cash Flows

The following item is classified as part of 'investing activities' in the statement of cash flows:

A company reported the following information for a financial year: What is the net cash inflow from operating activities?

During the financial year Sugianto Limited had sales of $42 000. The opening balance of accounts receivable was $9000, and the closing balance was $12 700. Bad debts amounting to $700 were written off during the period. The cash receipts from sales during the year amounted to:

A company reported the following information for a financial year: What is the net cash inflow (outflow) from financing activities?

The components of cash and cash equivalents:

A company reported the following information for a financial year: What is the net cash inflow (outflow) from investing activities?

The method of presentation method of operating cash flows that separates gross cash inflows from cash outflows is known as the:

An item or transaction will qualify for classification as a cash equivalent:

Cash flows arising from investing or financing activities may be reported on a net basis when:

During the financial year, Cresswell Limited had a cost of sales amounting to $260 000. Opening and ending balances of related accounts were: A discount of $2000 for prompt payment was received. The amount of cash paid for goods purchased during the year was:

Items classified as financing activities on an entity's statement of cash flows are usually associated with:

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

The following item is classified as a 'financing activity' in the statement of cash flows:

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

The following cash flow activities are regarded as investing cash flows:

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 Reporting

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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