Question 1

The statement concerning the treatment of the purchase and sale of non-current assets in a statement of cash flows that is incorrect is:

Accepted Answer

A) The carrying value of a non-current asset that has been sold is treated as an investing outflow 
B) The proceeds of sale from a non-current asset are treated as an investing inflow 
C) The cash purchase of a non-current asset is treated as an investing outflow 
D) Inflows and outflows for the purchase and sale of non-current assets must not be netted off against each other 
A) The carrying value of a non-current asset that has been sold is treated as an investing outflow 
B) The proceeds of sale from a non-current asset are treated as an investing inflow 
C) The cash purchase of a non-current asset is treated as an investing outflow 
D) Inflows and outflows for the purchase and sale of non-current assets must not be netted off against each other A

Question 2

The untrue statement is:

Accepted Answer

A) The statement of cash flows can provide information about the causes of changes in the entity's cash position over the period 
B) Analysis of an entity's cash flow position requires an examination of trends in statement of cash flows items over several years 
C) The statement of cash flows can explain the effects of operating activities on the entity's cash position 
D) The statement of cash flows effectively duplicates the function of the cash budget 
A) The statement of cash flows can provide information about the causes of changes in the entity's cash position over the period 
B) Analysis of an entity's cash flow position requires an examination of trends in statement of cash flows items over several years 
C) The statement of cash flows can explain the effects of operating activities on the entity's cash position 
D) The statement of cash flows effectively duplicates the function of the cash budget D

Question 3

Which of these is a transaction that would be reported in the statement of cash flows itself rather than in the notes?

Accepted Answer

A) A bonus share issue 
B) Amortisation of goodwill 
C) Interim dividend paid 
D) The acquisition of another entity by means of a share issue 
A) A bonus share issue 
B) Amortisation of goodwill 
C) Interim dividend paid 
D) The acquisition of another entity by means of a share issue C

Question 4

Which of the following is not classified as a financing activity by IAS 7/AASB 107?

Accepted Answer

A) Dividends paid to shareholders 
B) The sale of shares that have been held as an investment 
C) The issue of shares by a company to raise capital 
D) Repayment of borrowings 
A) Dividends paid to shareholders 
B) The sale of shares that have been held as an investment 
C) The issue of shares by a company to raise capital 
D) Repayment of borrowings

Question 5

Which statement concerning the interpretation of a statement of cash flows is untrue?

Accepted Answer

A) The statement of cash flows as required under IAS 7/AASB 107 only goes some of the way in enabling users to establish the liquidity/solvency position of an entity 
B) Ways in which cash flows can be manipulated include delaying cash payments and employing finance leases 
C) It is the indirect method rather than the direct method of preparation that is preferred by the standard setters 
D) The notes to the statement of cash flows are important in interpreting the firm's cash position 
A) The statement of cash flows as required under IAS 7/AASB 107 only goes some of the way in enabling users to establish the liquidity/solvency position of an entity 
B) Ways in which cash flows can be manipulated include delaying cash payments and employing finance leases 
C) It is the indirect method rather than the direct method of preparation that is preferred by the standard setters 
D) The notes to the statement of cash flows are important in interpreting the firm's cash position

Question 6

Determine the amount of cash received from customers during 2014. $$\begin{array} { l r } 
\text { Accounts Receiv able (31-Dec-2013) } & \$ 21,000 \
\text { Accounts Receiv able (31-Dec-2014) } & 18,000 \
\text { Sales } & 90,000
\end{array}$$

Accepted Answer

A) $57 000 
B) $63 000 
C) $87 000 
D) $93 000 
A) $57 000 
B) $63 000 
C) $87 000 
D) $93 000

Question 7

OPS Ltd provided the following information for the year ended 30 June 2014.
Revenue $240 000
Accounts receivable 1 July 2013 30 000
Accounts receivable 30 June 2014 20 000
Bad debts written off during the year* 6 000
* Direct method debit bad debts expense $6 000; credit accounts receivable $6 000).
Cash receipts from customers for the year ending 30 June 2014 were?

Accepted Answer

A) $256 000 
B) $236 000 
C) $224 000 
D) $244 000 
A) $256 000 
B) $236 000 
C) $224 000 
D) $244 000

Question 8

Bender Ltd uses the allowance method of accounting for bad and doubtful debts.Their accounts show: $\begin{array}{lr}
\text { Allow ance for doubtful debts 1 July } 2013 & \$ 10200 \
\text { Allow ance for doubtful debts 30 June 2014 } & 14200 \
\text { Bad \& doubtful debts expense for the year } & 8000
\end{array}$ Calculate the amount of bad debts actually written off during the year.

Accepted Answer

A) $4 000 
B) $11 000 
C) $8 000 
D) $6 200 
A) $4 000 
B) $11 000 
C) $8 000 
D) $6 200

Question 9

How many of these would be classified as investing activities on a statement of cash flows?
O purchase of a computer
O issue of debentures
O purchase of inventory
O payment of dividends

Accepted Answer

A) One 
B) Two 
C) Three 
D) Four 
A) One 
B) Two 
C) Three 
D) Four

Question 10

During the year a firm reported that accounts receivable had increased by $35 000.If accrual basis sales were $200 000 the amount of cash received from customers during the year must have been:

Accepted Answer

A) $165 000 
B) $190 000 
C) $210 000 
D) $235 000 
A) $165 000 
B) $190 000 
C) $210 000 
D) $235 000

Question 11

Accrual-basis revenue plus/minus______ an increase in unearned revenue = cash-basis revenue.

Accepted Answer

The answer of Accrual-basis revenue plus/minus______ an increase in unearned...

Question 12

These are extracts from the balance sheets of Mitchell Ltd: $\begin{array}{lrr} &30 \text { June }\
& 2013 & 2014 \
\text { Plant } & \$ 10000 & \$ 15000 \
\text { Accurmulated depreciation - plant } & 4000 & 5000
\end{array}$
$\begin{array}{l}
\text { The income statement for the year ended } 30 \text { June } 2014 \text { shows: }\
\begin{array}{ll}
\text { Depreciation expense - plant } & 1500 \
\text { Proceeds from the sale of plant } & 1600 \
\text { Carrying value of plant sold } & 2500
\end{array}
\end{array}$ During the year Mitchell Ltd sold plant that had cost $3,000.The accumulated depreciation on the plant sold by Mitchell Ltd during year is:

Accepted Answer

A) $4000 
B) $1500 
C) $2500 
D) $500 
A) $4000 
B) $1500 
C) $2500 
D) $500

Question 13

In its most recent financial year the Michelbook Country Club reported that Accounts payable increased $13 000; inventory decreased $9000; profit was $22,000 and depreciation expense was $5000.On the statement of cash flows,net cash flow from operating activities is: Use the indirect approach

Accepted Answer

A) $5000 
B) $23 000 
C) $31 000 
D) $49 000 
A) $5000 
B) $23 000 
C) $31 000 
D) $49 000

Question 14

Under IAS 7/AASB 107 how many of these items is required to be disclosed in a note attached to the statement of cash flows?
.A reconciliation of cash and cash equivalents with the items reported in the balance sheet
.A reconciliation of net cash from operating activities with profit after income tax
.Details of cash flows from the acquisition and disposal of subsidiaries

Accepted Answer

A) 0 
B) 1 
C) 2 
D) 3 
A) 0 
B) 1 
C) 2 
D) 3

Question 15

Hocking Duck reports for 2014: $$\begin{array} { l r } 
\text { B eginning inventory } & \$ 30000 \
\text { Ending inventory } & 40000 \
\text { Cost of sales } & 90000
\end{array}$$ Determine credit purchases for the year.

Accepted Answer

A) $100 000 
B) $90 000 
C) $110 000 
D) $140 000 
A) $100 000 
B) $90 000 
C) $110 000 
D) $140 000

Question 16

The balance sheets of Bandy Ltd show: $\begin{array}{lll} &30 \text { June }\
& 2013 & 2014 \
\text { Final Dividend Pavable } & \$ 10000 & \$ 15000
\end{array}$ In addition to the information above,an interim dividend of $4000 was declared and paid on 31 January 2014.What amount in respect of dividends will appear in the statement of cash flows for the year ended 30 June 2014?

Accepted Answer

A) $4000 
B) $10 000 
C) $14 000 
D) $19 000 
A) $4000 
B) $10 000 
C) $14 000 
D) $19 000

Question 17

Which of these is not a way in which cash flows may be manipulated?

Accepted Answer

A) Use of barter 
B) Use of lease financing 
C) Deferring repayment of debts 
D) Charging excessive depreciation 
A) Use of barter 
B) Use of lease financing 
C) Deferring repayment of debts 
D) Charging excessive depreciation

Question 18

The records of Count Bases Pizza's showed the following:
$\begin{array}{lcr}&30 \text { June } 13&30 \text { June } 14\
\text { Pizza ovens and equipment } & \$ 49000 & \$ 53000 \
\text { Accumulated depreciation ovens and equipment } & 10000 & 12000\
\text { Cost of equipment sold } && 5000 \
\text { Carrying value of equipment sold } && 3000 \
\text { Proceeds of sale of equipment } && 4500
\end{array}$
What is the investing cash inflow for equipment sold during 2013/14?

Accepted Answer

A) Carrying value of equipment sold $3 000 
B) Equipment sold $4 000 
C) Proceeds of sale of equipment $4 500 
D) Cost of equipment sold $5 000 
A) Carrying value of equipment sold $3 000 
B) Equipment sold $4 000 
C) Proceeds of sale of equipment $4 500 
D) Cost of equipment sold $5 000

Question 19

How many of these are non-cash transactions?
.Expense for impairment of goodwill
.A share dividend
.A discount allowed
.A bad debt write-off

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 20

O______________ activities in a statement of cash flows are those activities which relate to the main revenue-producing activities of the entity.

Accepted Answer

Operating

The statement concerning the treatment of the purchase and sale of non-current assets in a statement of cash flows that is incorrect is:

The untrue statement is:

Which of these is a transaction that would be reported in the statement of cash flows itself rather than in the notes?

Which of the following is not classified as a financing activity by IAS 7/AASB 107?

Which statement concerning the interpretation of a statement of cash flows is untrue?

Determine the amount of cash received from customers during 2014. Accounts Receiv able (31-Dec-2013) \ 21,000 Accounts Receiv able (31-Dec-2014) 18,000 Sales 90,000

How many of these would be classified as investing activities on a statement of cash flows? O purchase of a computer O issue of debentures O purchase of inventory O payment of dividends

During the year a firm reported that accounts receivable had increased by $35 000.If accrual basis sales were $200 000 the amount of cash received from customers during the year must have been:

Accrual-basis revenue plus/minus______ an increase in unearned revenue = cash-basis revenue.

In its most recent financial year the Michelbook Country Club reported that Accounts payable increased $13 000; inventory decreased $9000; profit was $22,000 and depreciation expense was $5000.On the statement of cash flows,net cash flow from operating activities is: Use the indirect approach

Hocking Duck reports for 2014: B eginning inventory \ 30000 Ending inventory 40000 Cost of sales 90000 Determine credit purchases for the year.

Which of these is not a way in which cash flows may be manipulated?

How many of these are non-cash transactions? .Expense for impairment of goodwill .A share dividend .A discount allowed .A bad debt write-off

O______________ activities in a statement of cash flows are those activities which relate to the main revenue-producing activities of the entity.

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Recording Transactions

Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Retailing

Accounting for Systems

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and Internal Control

Cost-Volume-Profit Analysis for Decision Making

Budgeting for Planning and Control

Performance Evaluation for Managers

Differential Analysis,profitability Analysis and Capital Budgeting

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Analysis and Interpretation of Financial Statements

Filters

Exam 24: Liabilities

The statement concerning the treatment of the purchase and sale of non-current assets in a statement of cash flows that is incorrect is:

The untrue statement is:

Which of these is a transaction that would be reported in the statement of cash flows itself rather than in the notes?

Which of the following is not classified as a financing activity by IAS 7/AASB 107?

Which statement concerning the interpretation of a statement of cash flows is untrue?

Determine the amount of cash received from customers during 2014. Accounts Receiv able (31-Dec-2013) \ 21,000 Accounts Receiv able (31-Dec-2014) 18,000 Sales 90,000

How many of these would be classified as investing activities on a statement of cash flows? O purchase of a computer O issue of debentures O purchase of inventory O payment of dividends

During the year a firm reported that accounts receivable had increased by $35 000.If accrual basis sales were $200 000 the amount of cash received from customers during the year must have been:

Accrual-basis revenue plus/minus______ an increase in unearned revenue = cash-basis revenue.

In its most recent financial year the Michelbook Country Club reported that Accounts payable increased $13 000; inventory decreased $9000; profit was $22,000 and depreciation expense was $5000.On the statement of cash flows,net cash flow from operating activities is: Use the indirect approach

Hocking Duck reports for 2014: B eginning inventory \ 30000 Ending inventory 40000 Cost of sales 90000 Determine credit purchases for the year.

Which of these is not a way in which cash flows may be manipulated?

How many of these are non-cash transactions? .Expense for impairment of goodwill .A share dividend .A discount allowed .A bad debt write-off

O______________ activities in a statement of cash flows are those activities which relate to the main revenue-producing activities of the entity.

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Recording Transactions

Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Retailing

Accounting for Systems

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and Internal Control

Cost-Volume-Profit Analysis for Decision Making

Budgeting for Planning and Control

Performance Evaluation for Managers

Differential Analysis,profitability Analysis and Capital Budgeting

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Analysis and Interpretation of Financial Statements

Filters