10. Which of the following is not a required disclosure in the notes to the financial statements?

A. Summary of significant accounting policies.

B. Supporting information for items presented on the face of the financial Statements.

C. Names of shareholders of record as of the balance sheet date.

D. Liabilities whose occurrence is probable but whose amount cannot be measured reliably.

11. If an entity has only one class of share capital outstanding, earnings per share is computed by dividing net profit by

A. Number of outstanding shares at the end of the period.

B. Weighted average number of shares during the period.

C. Number of outstanding shares at the beginning of the period.

D. Average number of outstanding years during the last two years.

12. In the statement of cash flows, financing activities are those activities

A. That involves the production or purchase and the sale of goods and services to customers, including expenditures to administer the business.

B. That involves making and collecting loans or purchasing and selling plant assets and other productive assets.

C. With owners or long-term creditors of the business or that involve borrowing cash on a short-term basis.

D. That includes receipts of interest payments, cash collections from customers and receipt of cash dividends from other companies.

13. In the statement of cash flows, investing activities are

A. Transactions that involve making and collecting loans or that involve purchasing and selling plant assets and other productive assets.

B. Transactions with owners or long-term creditors of the business or that involve borrowing cash on a short-term basis.

C. Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures to administer the business.

D. Cash flows such as proceeds from insurance bonds and cash outflows such as payments of principal amounts owed.

14. Which of the following is a correct way to compute cash flow from operations using the indirect method? (Disregard income tax effect).

A. Profit + depreciation increase in accounts receivable + decrease in accounts payable.

B. Profit + depreciation increase in accounts receivable + increase in accounts payable.

C. Profit depreciation increase in accounts receivable + decrease in accounts payable.

D. Profit + depreciation + increase in accounts receivable decrease in accounts payable.

15. In s a statement of cash flows using indirect method of presenting cash flow from operating activities, depreciation is treated as an adjustment to reported profit because depreciation

A. Reduces the reported profit but does not involve an outflow of cash.

B. Reduces the reported profit and involves an inflow of cash.

C. Is an inflow of cash for asset replacement fund.

D. Usually represents a significant portion of operating expenses.

16. In preparing a statement of cash flows, which of the following transactions would be considered an investing activity?

A. Sale of a business segment.

B. Issuance of bonds payable at a discount.

C. Purchase of treasury shares.

D. Sale of share capital.

17. In preparing a statement of cash flows, sale of treasury shares at an amount greater than cost would be classified as a/an

A. Transfer activity.

B. Operating activity.

C. Investing activity.

D. Financing activity.

18. The movement of the balance of retained earnings account is presented in the

A. Statement of financial position.

B. Statement of comprehensive income.

C. Statement of changes in equity.

D. Statement of cash flows.