Question
which of the following statements is correct relating to preparation of statement of cash flows? a. Partnerships are not allowed to prepare a statement of
which of the following statements is correct relating to preparation of statement of cash flows?
a.
Partnerships are not allowed to prepare a statement of cash flows.
b.
Statement of cash flows is prepared according to cash basis of accounting.
c.
Statement of cash flows shows only the investing activities of a business.
d.
Statement of cash flows is prepared according to the accrual basis of accounting.
e.
Statement of cash flows must only be prepared using the indirect method.
Which of the following statements is incorrect relating to preparation of statement of cash flows?
a.
Loss on sale of equipment is a non-cash item.
b.
Depreciation is a non-cash item.
c.
Dividends received is a separately disclosable item.
d.
Capitalization share issue is regarded as a cash item.
e.
Interest paid is a separately disclosable item.
3. The sale or purchases of property, plant and equipment was in cash.
The following information was extracted from the financial records of Mtho Limited at 28 February 2022, the end of the financial year:
| 2022 | 2021 |
| R | R |
Inventory | 72 288 | 21 504 |
Other financial assets | 124 800 | 120 000 |
Other financial liabilities | 152 640 | 172 800 |
Trade receivables | 55 008 | 45 504 |
Trade payables | 31 584 | 27 360 |
Additional information:
- The gross profit percentage is 35% on sales.
- Purchases for the year amounted to R282 400 and 49% thereof were on credit.
- Ratios reported in year ended 28 February 2021:
- Trade receivables collection period 66.9 days
- Trade payables payment period 64.9 days
- Inventory turnover rate 6 times
- Only 27% of the total sales were cash sales.
Which of the following alternatives represents the correct trade receivables collection period of Mtho Limited for year 2022?
a.
66.9
b.
51.48
c.
70.52
d.
141.04
e.
142.03
Which of the following alternatives represents the correct trade payables payment period of Mtho Limited for year 2022?
a.
38.09
b.
156.48
c.
155.48
d.
77.74
e.
64.9
Which of the following alternatives represents the correct inventory turnover rate of Mtho Limited for year 2022?
a.
3.22
b.
4.94
c.
2.47
d.
6
e.
2.17
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