Quiz 5

Which of the following would be shown on a company's Cash Flow Statement? The impairment loss on the company's intangible assets. The gain from the sale of the company's investment property. The proceeds from one shareholder selling shares to another shareholder. None of the other options would be shown

None of the other options would be shown (A company's Cash Flow Statement does not show impairment losses, gains from sale of assets or proceeds from shareholders selling shares.)

The following item is not likely to cause a difference between the accounting profit and cash from operations: A sale on credit just before the end of the financial period. Repayment of a loan during the financial period. The purchase of inventory for cash, which remains unsold at the end of the period. Depreciation of assets

Repayment of a loan during the financial period.

Which of the following transactions will affect accounting profit, but not cash flow? Repayment of a loan. Payment of dividends. Sale of inventory on credit. Purchase of inventory on credit.

Sale of inventory on credit.

Businesses exist for the primary purpose of generating wealth or profit. This profit is reported in which accounting report? The balance sheet The statement of cash flows All of the other options The income statement

The income statement

On a Statement of Cash Flows an increase in term borrowings is classified as a cash inflow from financing activities. a cash outflow from investing activities. a cash inflow from investing activities. a cash outflow from financing activities.

a cash inflow from financing activities.

Expenses are the cost of providing goods and services and result in: increases in both assets and liabilities. decreased assets or increased liabilities. decreases in both assets and liabilities. increased assets or decreased liabilities.

decreased assets or increased liabilities.

Which of the following items would not appear in a Statement of Cash Flows? wages paid rent paid cash sales depreciation

depreciation

A company reported depreciation expense of $30,000 for the latest financial year. The depreciation expense would have an effect on cash flow if assets were purchased during the year. decreased cash flow for the year $30,000. had no effect on cash flow for the year. increased cash flow for the year $30,000.

had no effect on cash flow for the year.

Revenues are the prices charged to customers and result in: decreased assets or increased liabilities. increased assets or decreased liabilities. decreases in both assets and liabilities. increases in both assets and liabilities.

increased assets or decreased liabilities.

On a Statement of Cash Flows, an example of a cash flow from an investing activity is payment of dividends. payment of cash to suppliers for inventory. receipt of cash from sale of equipment. receipt of cash from the issue of debentures

receipt of cash from sale of equipment.

Which of the following is not a possible reason for the difference between 'Cash Flow from Operating Activities' and 'Net Profit'? Land purchased for cash. Increase in inventories. Depreciation on fixed assets. Revenue received in advance.

Land purchased for cash. The purchase of non-current asset is an investing activity

Proceeds from the issue of shares will appear in the following section of the Statement of Cash Flows does not appear in the Statement of Cash Flows cash flows from investing activities cash flows from financing activities cash flows from operating activities

cash flows from financing activities

On the Statement of Cash Flows, the expenditure for prepaid rent will be shown as a cash outflow for financing activities. None of the other options. investing activities. operating activities.

operating activities

When preparing accounting reports for external use, which item need not be included in the determination of profit or loss but, under the accounting standards, can be taken straight to an equity account? Profit on the disposal of an asset. All of the options can be taken straight to equity. An upward revaluation increment for a non-current asset. Extraordinary income.

An upward revaluation increment for a non-current asset. In accounting reports prepared for external use, an upward revaluation increment for a non-current asset need not be included in the determination of profit or loss but can be added directly to an asset revaluation reserve. It must be shown in the statement of comprehensive income.