1. Which statement is true?

A.		The statement of cash flows explains the changes between the income statement and the balance sheet.
B.		The balance sheet links two statements of comprehensive income.
C.		The statement of cash flows summarises the movements in the bank account over an accounting period.
D.		None of the statements is true.

2. Which of these is a reason why a statement of cash flows could show a negative cash flow from operating activities even though the income statement showed a profit?

	A.	An increase in the amount of inventory held.
	B.	A decrease in the amount owing by debtors.
	C.	An increase in the amount owing by creditors.
	D.	An increase in depreciation charged.

3. How are salaries owing to the employees at year end classified in the Balance Sheet?

A.		Current liability.
B.		Current asset.
C.		Non-current liability.
D.		Non -current asset.