2) It is true that:

A) profit is the excess in cash inflows from income over the cash outflows from expenses.

B) income is recognised when the economic benefits are certain and can be reliably measured.

C)whether a transaction is made with cash or credit has no effect on the profit of an entity.

D) income is only recognised when cash is received.

3) The statement of comprehensive income reports the profit or loss and other comprehensive income. Which of the following is an example of other comprehensive income?

A) Dividends

B) Royalties

C) Non-current asset revaluations taken directly to a revaluation surplus

D) Sales

4/ Which of these would not be classified as an operating item in a statement of cash flows?

A) Decrease in bank overdraft.

B) Cash dividends received.

C) Interest expense paid.

D) Payment of instalment for lease of shop.