Question 1

Under IAS 7/AASB 107 which of these needs to be disclosed in the notes attached to the statement of cash flows?

Accepted Answer

A)  Standby credit arrangements 
B)  The closing bank balance 
C)  The opening bank balance 
D)  Proceeds from a share issue 
A)  Standby credit arrangements 
B)  The closing bank balance 
C)  The opening bank balance 
D)  Proceeds from a share issue A

Question 2

John Co had a cost of sales, during the year just ended, of $280 000. During the year accounts payable and inventory each increased by $12 000. What amount of cash was paid for purchases during the year?

Accepted Answer

A)  $256 000 
B)  $268 000 
C)  $280 000 
D)  $292 000 
A)  $256 000 
B)  $268 000 
C)  $280 000 
D)  $292 000 C

Question 3

When preparing the note attached to the cash flow statement reconciling profit and cash flow from operations, proceeds from the disposal of non-current assets are:

Accepted Answer

A)  added back to the profit. 
B)  sometimes added back to the profit and sometimes subtracted from the profit depending on whether a loss or profit on disposal is incurred. 
C)  subtracted from the profit. 
D)  do not appear in the reconciliation. 
A)  added back to the profit. 
B)  sometimes added back to the profit and sometimes subtracted from the profit depending on whether a loss or profit on disposal is incurred. 
C)  subtracted from the profit. 
D)  do not appear in the reconciliation. C

Question 4

In its most recent financial year the Arrow Ltd reported that Accounts payable increased $13 000; inventory decreased $6000; profit was $41 000 and depreciation expense was $5000. On the statement of cash flows, what is net cash flow from operating activities is? (Use the indirect approach.)

Accepted Answer

A)  $53 000 
B)  $65 000 
C)  $43 000 
D)  $55 000 
A)  $53 000 
B)  $65 000 
C)  $43 000 
D)  $55 000

Question 5

Which of these are methods that are used to prepare a statement of cash flows?
i. Use information obtained directly from the primary records of cash transactions.
ii. Use the information in the accrual-based income statement and balance sheets but remove the effect of non-cash items.
iii. Use the information in the accrual-based income statement and balance sheets but add the effect of non-cash items.

Accepted Answer

A)  iii 
B)  ii. iii 
C)  i 
D)  i. ii 
A)  iii 
B)  ii. iii 
C)  i 
D)  i. ii

Question 6

For a statement of cash flows, when preparing the note reconciling a net loss and cash flow from operations, depreciation is:

Accepted Answer

A)  added back to the net loss. 
B)  subtracted from net loss. 
C)  does not appear in the reconciliation. 
D)  appears as part of the profit figure. 
A)  added back to the net loss. 
B)  subtracted from net loss. 
C)  does not appear in the reconciliation. 
D)  appears as part of the profit figure.

Question 7

Accepted Answer

A)  $89 000. 
B)  $91 000. 
C)  $94 000. 
D)  $101 000. 
A)  $89 000. 
B)  $91 000. 
C)  $94 000. 
D)  $101 000.

Question 8

Which statement is untrue?

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.

Question 9

If cost of sales is $500 000, inventory has increased by $8000 and creditors have decreased by $15 000 what is the amount of cash paid for the purchase of goods for resale?

Accepted Answer

A)  $500 000 
B)  $507 000 
C)  $523 000 
D)  $493 000 
A)  $500 000 
B)  $507 000 
C)  $523 000 
D)  $493 000

Question 10

Accepted Answer

A)  $12 000 
B)  $39 000 
C)  $63 000 
D)  Cannot be calculated from the information provided 
A)  $12 000 
B)  $39 000 
C)  $63 000 
D)  Cannot be calculated from the information provided

Question 11

How many of these are non-cash transactions?
F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10Expense for impairment of goodwill
F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10A share dividend
F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10A discount allowed
F1F1F1S1F1F1F10F1F1F1S1F1F1F10F1F1F1S1F1F1F10A bad debt write-off

Accepted Answer

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

Question 12

What effect does this journal entry have on cash flows?
Dr Depreciation expense $88 200
Cr Accumulated depreciation $88 200

Accepted Answer

A)  Increase outflows 
B)  Decrease outflows 
C)  No effect on outflows or inflows 
D)  Decrease inflows 
A)  Increase outflows 
B)  Decrease outflows 
C)  No effect on outflows or inflows 
D)  Decrease inflows

Question 13

From the following information, determine the amount of cash received from customers during 2014.
Accounts receivable (31-Dec-2013) $63 000
Accounts receivable (31-Dec-2014) 54 000
Sales 270 000

Accepted Answer

A)  $171 000 
B)  $189 000 
C)  $261 000 
D)  $279 000 
A)  $171 000 
B)  $189 000 
C)  $261 000 
D)  $279 000

Question 14

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 15

The statement of profit or loss of Zang Co shows accrual-basis interest income for the year ended 30 June 2016 as $400. The comparative balance sheets show that interest receivable at 30 June 2015 and 30 June 2016 was $45 and $80 respectively. Determine the amount of cash received by way of interest during the year.

Accepted Answer

A)  $45 
B)  $365 
C)  $400 
D)  $435 
A)  $45 
B)  $365 
C)  $400 
D)  $435

Question 16

Assume tax is paid annually in a lump sum. The beginning balance in the current tax liability account is $70 000 and the ending balance is $79 000. There was no under or over provision of tax for the year. What is the amount of tax paid to be included in the statement of cash flows for the period?

Accepted Answer

A)  Nil 
B)  $70 000 
C)  $80 000 
D)  $79 000 
A)  Nil 
B)  $70 000 
C)  $80 000 
D)  $79 000

Question 17

Accepted Answer

A)  Carrying value of equipment sold $3000 
B)  Equipment sold $4000 
C)  Proceeds of sale of equipment $4500 
D)  Cost of equipment sold $5000 
A)  Carrying value of equipment sold $3000 
B)  Equipment sold $4000 
C)  Proceeds of sale of equipment $4500 
D)  Cost of equipment sold $5000

Question 18

Uri Ltd uses the allowance method of accounting for bad and doubtful debts. Bad and doubtful debts expense shown in the income statement is $7000 and the amount of bad debts actually written off is $5000. If sales are $330 000 and customer's balances have increased by $15 000 over the period, calculate the amount to be shown in the statement of cash flows for receipts from customers.

Accepted Answer

A)  $330 000 
B)  $320 000 
C)  $310 000 
D)  $315 000 
A)  $330 000 
B)  $320 000 
C)  $310 000 
D)  $315 000

Question 19

Discount allowed is a:

Accepted Answer

A)  cash item that is included as an outflow in the statement of cash flows. 
B)  cash item that is adjusted in a note attached to the statement of cash flows. 
C)  non-cash items that is deducted from accrual based revenue and thus not included in the statement of cash flows. 
D)  cash item that is included as an inflow in the statement of cash flows. 
A)  cash item that is included as an outflow in the statement of cash flows. 
B)  cash item that is adjusted in a note attached to the statement of cash flows. 
C)  non-cash items that is deducted from accrual based revenue and thus not included in the statement of cash flows. 
D)  cash item that is included as an inflow in the statement of cash flows.

Question 20

B

Accepted Answer

A)  $300 000 
B)  $270 000 
C)  $330 000 
D)  $420 000 
A)  $300 000 
B)  $270 000 
C)  $330 000 
D)  $420 000

Under IAS 7/AASB 107 which of these needs to be disclosed in the notes attached to the statement of cash flows?

John Co had a cost of sales, during the year just ended, of $280 000. During the year accounts payable and inventory each increased by $12 000. What amount of cash was paid for purchases during the year?

When preparing the note attached to the cash flow statement reconciling profit and cash flow from operations, proceeds from the disposal of non-current assets are:

In its most recent financial year the Arrow Ltd reported that Accounts payable increased $13 000; inventory decreased $6000; profit was $41 000 and depreciation expense was $5000. On the statement of cash flows, what is net cash flow from operating activities is? (Use the indirect approach.)

For a statement of cash flows, when preparing the note reconciling a net loss and cash flow from operations, depreciation is:

Which statement is untrue?

If cost of sales is $500 000, inventory has increased by $8000 and creditors have decreased by $15 000 what is the amount of cash paid for the purchase of goods for resale?

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

What effect does this journal entry have on cash flows? Dr Depreciation expense $88 200 Cr Accumulated depreciation $88 200

From the following information, determine the amount of cash received from customers during 2014. Accounts receivable (31-Dec-2013) $63 000 Accounts receivable (31-Dec-2014) 54 000 Sales 270 000

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

Assume tax is paid annually in a lump sum. The beginning balance in the current tax liability account is $70 000 and the ending balance is $79 000. There was no under or over provision of tax for the year. What is the amount of tax paid to be included in the statement of cash flows for the period?

Discount allowed is a:

B

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 Closing and Reversing Entries

Accounting for Retailing

Accounting for Systems

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and 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: Statement of Cash Flows

Under IAS 7/AASB 107 which of these needs to be disclosed in the notes attached to the statement of cash flows?

John Co had a cost of sales, during the year just ended, of $280 000. During the year accounts payable and inventory each increased by $12 000. What amount of cash was paid for purchases during the year?

When preparing the note attached to the cash flow statement reconciling profit and cash flow from operations, proceeds from the disposal of non-current assets are:

In its most recent financial year the Arrow Ltd reported that Accounts payable increased $13 000; inventory decreased $6000; profit was $41 000 and depreciation expense was $5000. On the statement of cash flows, what is net cash flow from operating activities is? (Use the indirect approach.)

For a statement of cash flows, when preparing the note reconciling a net loss and cash flow from operations, depreciation is:

Which statement is untrue?

If cost of sales is $500 000, inventory has increased by $8000 and creditors have decreased by $15 000 what is the amount of cash paid for the purchase of goods for resale?

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

What effect does this journal entry have on cash flows? Dr Depreciation expense $88 200 Cr Accumulated depreciation $88 200

From the following information, determine the amount of cash received from customers during 2014. Accounts receivable (31-Dec-2013) $63 000 Accounts receivable (31-Dec-2014) 54 000 Sales 270 000

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

Assume tax is paid annually in a lump sum. The beginning balance in the current tax liability account is $70 000 and the ending balance is $79 000. There was no under or over provision of tax for the year. What is the amount of tax paid to be included in the statement of cash flows for the period?

Discount allowed is a:

B

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 Closing and Reversing Entries

Accounting for Retailing

Accounting for Systems

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and 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