1. You have been introduced to the preparation of the income statement and cash flow statement. Select which one of the following is the accounting basis for preparing the cash flow statement a) Accrual accounting b) Cash basis accounting c) Credit basis accounting d) Cash flow basis accounting 2. The preparation of the cash flow statement is guided by IAS 7. What is the objective of IAS 72 a) To provide additional information about profit and losses b) To provide additional information about generation of cash c) To provide additional information about operating cash d) To provide additional information about investing cash 3. Which of the following headings is not a classification of cash flows in IAS 7? a) Operating b) Investing c) Advertising d) Financing 4. The extract below shows the equity capital for Company A. Included in this amount is the share premium account. Provide the explanation for the existence of the share premium account. Company A '000 Called-up ordinary share capital 200 Share premium account 40 Revaluation reserve 69 Retained earnings 123 432 a) The company paid insurance premium of 40,000 for year. b) The company made a profit of 40,000 for the year. c) The company issued additional ordinary share capital during the year. The difference between the par value of the shares and issue price is 40,000. d) The difference between the book value of the shares and their market value during the year amounted to 40,000