The effects on the Statement of Financial Position of the business when the business bought machinery for cash are to: Select one: a increase assets (machinery): decrease assets (cash at bank) b. increase assets (machinery): increase liabilities (trade payable) C. decrease assets (machinery): decrease equity (share capital) d. decrease assets (machinery): increase assets (trade receivables) Which of the following item is not required in the calculation of gross profit? Select one: a. Operating expenses b. Opening inventories c. Goods purchased for resale d. Sales revenue Consider the following statements: (a) Investing activities in a statement of cash flows are concerned with the raising and repayment of long term debt and equity financing of an entity. (b) In a healthy business, the operating cash flows are normally negative. (c) Statement of cash flows measures profitability. (d) Cash accounting is adopted in the preparation of statement of cash flows Select one: a. (a) False; (b) True; (c) True; and (d) False b. (a) True; (b) False; (c) False; and (d) True c. (a) True: (b) True; (c) True; and (d) False d. (a) False; (b) False; (c) False; and (d) True Consider the following statements: (0) Ordinary shares are those shares in a company that confer the shareholders the voting rights and entitlement of residual benefits of the company () Residual value is the expected amount for which a non-current asset is able to sell at the end of its estimated useful life. Prepayments are expenses spent but not yet paid as at the reporting date Select one: a. (1) False; (II) False; and (ii) True b. () True; () True; and (ii) true c.) True: () True; and (ii) False d.) False: () True; and (ii) True PQR Ltd has the following information for the year ended 30 November 2013 - Particulars Sales revenue 4,000,000 Cost of sales 3,000,000 Operating profit Profit before taxation Profit after taxation 500,000 430,000 220,000 650,000 1,100,000 Total Equity Total assets Calculate the gross profit margin Select one: a. 11% b. 6% c. 25% d. 13% A company has annual cost of sales of 2 million and its average inventories turnover period is 56 days, assuming 365 days a year. How much is the average inventories held? Select one: a. 36,364 b. 301,370 c. 13,272.727 d. 150,685 A company has a current ratio of 2:5. This means that: Select one: a. its current liabilities equal its current assets b. its current assets are lower than its current liabilities c. its current liabilities are lower than its current assets d. its current assets are sufficient to meet its current liabilities