Question 1

Investing activities include

1. repaying money previously borrowed.
2. obtaining capital from owners.
3. obtaining cash from creditors.collecting cash on loans previously made.
4. none of the above

1 points

QUESTION 2

In which section of the statement of cash flows would the payment of a dividend by a company to its shareholders be included?

1. operating activities
2. investing activities
3. financing activities
4. would not be included

1 points

QUESTION 3

Which of the following statements is true?

1. For an entity to survive, the net cash flow from operating activities should be positive.
2. For an entity to survive, the net cash flow frominvesting activities should be positive.
3. For an entity to survive, the net cash flow fromfinancing activities should be positive.
4. For an entity to survive, the net cash flow from operating activities should be negative.

1 points

QUESTION 4

Calculate the amount of cash flow from operating activities from the following information.Cash received from customers is $420,000, cash paid for wages and expenses is $230,000, depreciation of motor vehicles is $24,000, cash received from the sale of equipment is $25,000, gain on the sale of the equipment is $23,000.

1. $215,000
2. $166,000
3. $190,000
4. $191,000

1 points

QUESTION 5

Which of these would NOT be classified as an operating activity?

1. interest expense paid
2. payment of rent expense
3. decrease in bank balance
4. cash received from customers

1 points

QUESTION 6

1. Which of these is an early warning sign indicating problems with cash flows?
2. Cash from operating activities is higher than profit
3. Dividends paid are greater than cash flow from operations
4. A large amount has been spent on the acquisition of fixed assets
5. Proceeds from financing activities are used to finance investment activities
6. All of the above

1 points

QUESTION 7

1. Which of the following pieces of information can be found from a statement of cash flows but can noteasily be found from the financial statements prepared on an accruals basis?
2. whether the entity is generating cash from its operations
3. whether the entity is collecting its receivables in a timely manner
4. whether the entity is likely to be able to pay its debts as and when they fall due
5. all options are true

1 points

QUESTION 8

1. Which of the following is NOT an example of cash or cash equivalents?
2. deposit at call
3. money market deposit with 18 months maturity
4. bank overdraft
5. bank and non-bank bills

1 points

QUESTION 9

All financial statements are prepared on an accruals basis except the:

1. income statement
2. cash flow statement
3. balance sheet
4. statement of changes in equity

1 points

QUESTION 10

The operating activities section of a statement of cash flows shows the cash effects of income and expense transactions.

1. True
2. False

1 points

QUESTION 11

1. The direct method of preparing a statement of cash flows is the method that calculates cash flow from operations by adjusting profit or loss for the effects of transactions of a non-cash nature.
2. True
3. False

1 points

QUESTION 12

In a growing business that keeps its asset base up-to-date, total cash flow from investing activities will normally be:

1. positive.
2. negative.
3. more than cash flow from operations.
4. none of the above.

1 points

QUESTION 13

A transaction that wouldnotappear in a cash flow statement is:

1. recording depreciation expense.
2. the creation of a provision for waranty.
3. the upward revaluation of an asset.
4. all of the above.

1 points

QUESTION 14

Operating activities are concerned with:

1. the trading and/or service operations of the business.
2. the sale or disposal of non-current assets.
3. borrowing or lending.
4. none of the above.

1 points

QUESTION 15

Baltimore Company had a long-term debt of $1,000,000. To extinguish this debt the company issued $1,000,000 of fully paid shares to the lender. This transaction would have the following impact on the cash flow statement:

1. decrease cash by $1,000,000.
2. nil impact. This is a non-cash transaction.
3. increase cash flow from financing activities by $1,000,000.
4. increase cash by $1,000,000.

1 points

QUESTION 16

Company F received $20,000 in cash in repayment of a loan made to L. Lee.In the cash flow statement of Company F the $20,000 would appear as:

1. a financing outflow
2. an investing outflow
3. a financing inflow
4. an investing inflow

1 points

QUESTION 17

Select the statement that isnottrue.

1. The concept of cash underpinning the cash flow statement is 'cash and cash equivalents'.
2. A bank overdraft is an example of a 'cash equivalent'.
3. If a firm is operating profitably it will automatically have plenty of cash.
4. Cash is the pre-eminent asset as it is the medium with which claims are normally settled.

1 points

QUESTION 18

Cash inflows and outflows associated with changes in non-current liabilities and equity, not arising from profit, are included in which section of the cash flow statement?

1. investing
2. financing
3. operating
4. non-current

1 points

QUESTION 19

Depreciation of plant and equipment will appear in which section of the cash flow statement?

1. does not appear in the statement
2. investing activities section
3. financing activities section
4. operating activities section

1 points

QUESTION 20

All of the following are operating cash flows, except:

1. interest received.
2. income tax paid.
3. dividends paid to shareholders.
4. payments to suppliers.