Q5. An entity purchases a building and pays in equity shares of the entity. This transaction should be treated in the statement of cash flows as follows: a) The purchase of the building should be operating cash outflow and the issuance of shares financing cash outflows This does not belong in a cash flow statement and should be disclosed only in the notes to the Cashflow statements c) The purchase of the building should be financing cash outflow and the issuance of shares as financing cash outflows d) The purchase of the building should be investing cash outflow and the issuance of shares as financing cash outflows e) None of the above Q6. An entity repays a loan including interest. This transaction should be treated in the statement of cash flows as follows: a) The repayment of the capital or principal should be operating cash outflow and the interest of the loan financing cash outflows b) This does not belong in a cash flow statement and should be disclosed only in the notes to the Cashflow statements c) The repayment of the principal should be financing cash outflow and the interest as operating activity d) The repayment of the loan should be investing cash outflow and the interest as financing cash outflows e) None of the above 7. Which of the following is arguably the main advantage of the indirect method? a) Highlights the differences between profit and net cash flow from financing activi- b) Highlights the differences between profit and net cash flow from investment acti ) Highlights the differences between profit and net cash flow from operating activ All of the above e) None of the above QS. An entity purchases a building and pays in equity shares of the entity. This transaction should be treated in the statement of cash flows as follows: #) The purchase of the building should be operating cash outflow and the issuance of This does not belong in a cash flow statement and should be disclosed only in the notes to the Cashflow statements c) The purchase of the building should be financing cash outflow and the issuance of shares as financing cash outflows d) The purchase of the building should be investing cash outflow and the issuance of shares as financing cash outflows e) None of the above Q6. An entity repays a loan including interest. This transaction should be treated in the statement of cash flows as follows: a) The repayment of the capital or principal should be operating cash outflow and the interest of the loan financing cash outflows b) This does not belong in a cash flow statement and should be disclosed only in the notes to the Cashflow statements c) The repayment of the principal should be financing cash outflow and the interest as operating activity d) The repayment of the loan should be investing cash outflow and the interest as financing cash outflows e) None of the above Q7. Which of the following is arguably the main advantage of the indirect method? a) Highlights the differences between profit and net cash flow from financing activities b) Highlights the differences between profit and net cash flow from investment activities Highlights the differences between profit and net cash flow from operating activities d) All of the above e) None of the above