Financial Accounting Question Test Paper On Cash Flow Statement

Section A : 26 FILL IN THE BLANK Section B : 10 TRUE OR FALSE QUESTIONS Section C : 11 Multiple Choice Questions

Section A: Questions On Fill In The Blanks

On the right column please insert the items from which category: Category: X=Cash flows from Operating Activities Y=Cash flows from Investing Activities X=Cash flows from Financing Activities

Exam ple 1. 2. 3. 4. 5. 6. 7. 8.

:Depreciation

Am ortization of intangible asset Provision for doubtful debts Bad debts w ritten off W rite back of im pairm ent loss on property Provision for im pairm ent loss for short term investm ent Property, plant and equipm ent w ritten off N gain on disposal of property, plant and equipm et ent Unrealized loss on foreign exchange translation, net

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Financial Accounting Question Test Paper With ANSWERS On Cash Flow Statement
9. 10. 11. 12. 13. 14. 15. 16. 17. Part proceeds from disposal of non-current assets 18. Deposits paid for acquisition of properties 19. Proceeds from disposal of club m bership em 20. Purchase of a factory 21. Repaym ent of short term loan 22. Decrease in pledged deposits for financing facilities 23. 24. 25. N draw et dow of loan n Interest paid Proceeds from issuance of ordinary shares, net of related expenditure D raw dow of revolving credit facility n Share of profits of associated profits, net of tax Net gain on disposal of investm ent Interest received Dividends received Proceeds from disposal of investm ents Purchase of other investm ents Purchase of intangible assets Paym ent of stam duties and other costs p incidental to acquisition of property

26.

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Financial Accounting Question Test Paper With ANSWERS On Cash Flow Statement

SECTION B: TRUE OR FALSE

Indicate w hether each of the follow ing statem ents is true or false by placing:True = T False = F

1.

Under the direct m ethod, the increase in the trade receivables account is deducted from sales to determ ine the cash received from custom ers The direct m ethod provides a m ore accurate figure of cash flow from operating activities than does the indirect s m ethod Under the direct m ethod, depreciation is the first noncash account balance analyzed Cash receipts from the sale of fixed assets w ould be classified as cash flow from investing activities The statem ent of cash flow is required as part basic set of financial statem ents

2.

3.

4.

5.

6.

Cash outflows from the paym ent of cash dividends is a type of financing activity Under the indirect m ethod, increases in current liabilities are deducted from net incom reported on the incom statem e e ent in determ ining cash flow from operating activities s Noncash investing and financing activities that m have a ay significant effect on future cash flow should be included in a s separate schedule to the statem ent of cash flow s The correct am ount to include in cash flows from financing activities is cash dividends paid, not cash dividends declared The analysis of retained earnings provides the starting point for determ ining cash flow from operating activities under the s indirect m ethod only.

7.

8.

9.

10.

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Financial Accounting Question Test Paper With ANSWERS On Cash Flow Statement

SECTION C: QUESTIONS ON MULTIPLES CHOICE QUESTIONS

1 a. b. c. d. Which of the following is not one of the major sections of the statement of cash flows? Cash flows from financing activities cash flows from selling activities cash flows from operating activities cash flows from investing activities

Non cash investing and financing activities which may have significant effect on future cash flows are reported: a. b. c. d. in the statement of cash flows in a separate schedule to accompany the statement of cash flows in the retained earnings statement in a footnote accompanying the balance sheet

3. a.

A loss on the sale of land is reflected on the statement of cash flows by: adding the loss to the book value of the land to determine the cash flow from investing activities b. deducting the loss from net income to determine the cash flow from operating activities c. deducting the loss from the book value of the lad to determine the cash flow from investing activities d. both b and c

4.

Cash payments for income taxes are included on the statement of cash flows as : a. financing activities b. investing activities c. operating activities

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Financial Accounting Question Test Paper With ANSWERS On Cash Flow Statement
d. non-operating activities

5.

To convert the cost of merchandise sold as reported on the income statement to cash payments for merchandise, the cost of merchandise sold is increased for the: a. b. c. d. increase in inventories increase in accounts payable decrease in inventories decrease in accounts receivable

6.

Which of the following would not be considered a noncash investing and financing activity in preparing a statement of cash flows? a. b. c. d. withdrawal of cash by the owner of a business issuance of common stock to retire long-term debt acquisition of a manufacturing plant by issuing bonds issuance of common stock in exchange for convertible preferred stock

7.

An example of a cash flow from a financing activity is: a. b. c. d. receipt of cash from sale of land receipt of cash from collection of accounts receivable payment of cash for acquisition of treasury stock payment of cash for new machinery

8.

Which of the following items appears first on the statement of cash flows prepared using the direct method? a. b. c. d. retained earnings cash received from customers net income depreciation

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Financial Accounting Question Test Paper With ANSWERS On Cash Flow Statement

Under the direct method, which of the following items must be added to 9. determine cash payments for operating expenses? a. b. c. d. increase in accrued expenses decrease in prepaid expenses increase in income taxes payable increase in prepared expenses operating expenses reported on the income statement to

10.

Under the indirect method, which of the following items must be deducted from reported net income to determine net cash flow from operating activities? a. b. c. d. depreciation of fixed assets decreases in current assets decreases in current liabilities loss on sale of equipment

During the year, ABC plc declared $40,000 in cash dividends. If the beginning 11 . and ending balance of the dividends payable account was $12,000 and $10,000, respectively, what amount of cash paid for dividends will appear in the cash flow from financing activities section of the statement of cash flows? a. b. c. d. $30,000 $38,000 $40,000 $42,000

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Financial Accounting Question Test Paper With ANSWERS On Cash Flow Statement

ANSWER TO SECTION A: FILL IN THE BLANK

Q uestion 1 to 10 = Cash flows from O perating Activities Q uestion 11 to 20 = C ash flow from s Activities Q uestion 21 to 26 = Cash flow from Financing s Activities Investing

ANSWER TO SECTION B: TRUE OR FALSE

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

T F F T T T F T T T

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Financial Accounting Question Test Paper With ANSWERS On Cash Flow Statement

ANSWER TO SECTION C: MULTIPLES CHOICE QUESTIONS

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. B B C C A A C B D C D

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