Question 1

Which of the following is NOT an investing cash flow?

Accepted Answer

The repayment of a loan is a financing cash flow, not an investing cash flow. Investing cash flows include the acquisition or sale of long-term assets, such as equipment or other companies, as well as investments in securities and other financial instruments.

Question 2

During the year, Penso Ltd received $50 000 from its customers, $5 000 for the sale of a motor vehicle and $20 000 for the issue of shares. It paid $27 000 to suppliers and employees, $3 000 for income tax and $50 000 for new machinery. In addition, it paid out $12 000 as loan repayments. Its cash balance at the commencement of the year was $19 000. What were the cash flows from financing activities?

Accepted Answer

A

Question 3

Which of the following is NOT an operating cash flow?

Accepted Answer

Operating cash flows are the cash inflows and outflows that are directly related to a company's core operations, which include cash collections from customers, cash payments to suppliers, and cash payments to employees. Dividends paid are not considered operating cash flows as they are a distribution of profits to shareholders and are not directly related to the core operations of the company.

Question 4

During the year, Penso Ltd received $50 000 from its customers, $5 000 for the sale of a motor vehicle and $20 000 for the issue of shares. It paid $27 000 to suppliers and employees, $3 000 for income tax and $50 000 for new machinery. Its cash balance at the commencement of the year was $30 000. What were the cash flows from operating activities?

Accepted Answer

The answer of During the year, Penso Ltd received $50...

Question 5

Income tax expense was $200 000 for the year. Income tax payable was $20 000 at the beginning and $30 000 at the end of the year. Cash payment for income tax reported on the cash flow statement using the direct method is:

Accepted Answer

The cash payment for income tax is calculated as: Income tax expense ($200,000) + decrease in income tax payable ($20,000 - $30,000 = -$10,000) = $190,000.

Question 6

Which of the following transactions does NOT involve a cash flow?

Accepted Answer

Accrual of wage expense does not involve a cash flow as the payment of wages has not yet been made. It represents a liability that will be settled with a cash outflow in the future. The other transactions involve actual cash outflows or inflows. Prepayment of insurance involves a cash outflow, issue of shares involves a cash inflow, and unearned revenue involves a cash inflow followed by a future cash outflow.

Question 7

During the year, Penso Ltd received $50 000 from its customers, $5 000 for the sale of a motor vehicle and $20 000 for the issue of shares. It paid $27 000 to suppliers and employees, $3 000 for income tax and $50 000 for new machinery. In addition, it paid out $12 000 to redeem bonds. Its cash balance at the commencement of the year was $22 000. What were the cash flows from investing activities?

Accepted Answer

Cash flows from investing activities include the purchase of long-term assets and investments not related to the core operations of the business. Here, the cash outflow for new machinery ($50,000) and the cash inflow from the sale of a motor vehicle ($5,000) are considered investing activities. Therefore, the net cash flow from investing activities is -$45,000 ($5,000 - $50,000).

Question 8

Which of the following is NOT classified as an investing activity?

Accepted Answer

Issue of shares is considered a financing activity, not an investing activity. Investing activities involve the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Question 9

Use the information below to answer the following question.  What was the cash flow from investing activities?

Accepted Answer

The answer of Use the information below to answer the...

Question 10

Which of the following is classified under cash flow from operations?

Accepted Answer

Income taxes paid is classified under cash flow from operations as it represents a cash outflow related to the company's main operations. Dividend paid, purchase of office equipment for cash, and sale of office equipment for cash are all classified under cash flow from financing or investing activities.

Question 11

The net profit reported on the income statement for the current year was $50 000. Depreciation on property, plant and equipment was $31 000. What is the amount of cash flows from operating activities that would appear on the statement of cash flows prepared using the indirect method?

Accepted Answer

The answer of The net profit reported on the income...

Question 12

Determine the cash received from customers on account during July, based on the following data.

Accepted Answer

The cash received from customers on account can be determined by adding the increases in Accounts Receivable and subtracting the decrease in Accounts Receivable, which is as follows:

Beginning balance in Accounts Receivable: $20,000
Increases in Accounts Receivable during July: $30,000
Decrease in Accounts Receivable during July: $8,900

Therefore, cash received from customers on account during July = Beginning balance in Accounts Receivable + Increases in Accounts Receivable - Decrease in Accounts Receivable = $20,000 + $30,000 - $8,900 = $42,100. Hence, the correct option is C.

Question 13

Use the information below to answer the subsequent question.  The amount of inventory purchased during the year was:

Accepted Answer

The answer of Use the information below to answer the...

Question 14

A summary of the entries in the Cash ledger account of Staple Ltd for the month of January was as follows:  What were the receipts from customers of Staple Ltd?

Accepted Answer

The answer of A summary of the entries in the...

Question 15

Which of the following is NOT a financing cash flow?

Accepted Answer

Dividends received are considered an operating cash flow, not a financing cash flow. The other options listed are all financing cash flows.

Question 16

A summary of the entries in the Cash ledger account of Staple Ltd for the month of January was as follows:  What was the cash flow from investing activities of Staple Ltd?

Accepted Answer

The answer of A summary of the entries in the...

Question 17

Consider the following information for the year ended 30 June 2018.  What was the amount of cash received from customers?

Accepted Answer

The answer of Consider the following information for the year...

Question 18

Which of the following is NOT an example of financing cash flows?

Accepted Answer

The purchase of another entity is an example of investing cash flows, not financing cash flows. Repayment of borrowings, proceeds from borrowings, and issue of shares are all examples of financing cash flows.

Question 19

The cost of goods sold during the year was $50 000. Inventories were $11 500 and $9 500 at the beginning and end of the year, respectively. Accounts payable were $5 000 and $4 000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments to accounts payable would total:

Accepted Answer

Cash payments to accounts payable = Beginning accounts payable + Purchases - Ending accounts payable= $5,000 + $50,000 - $4,000= $49,000

Question 20

A summary of the entries in the Cash ledger account of Staple Ltd for the month of January was as follows:  What were the payments to suppliers and employees of Staple Ltd?

Accepted Answer

The answer of A summary of the entries in the...

Quiz 14: The Statement of Cash Flows

Which of the following is NOT an investing cash flow?

Which of the following is NOT an operating cash flow?

Income tax expense was $200 000 for the year. Income tax payable was $20 000 at the beginning and $30 000 at the end of the year. Cash payment for income tax reported on the cash flow statement using the direct method is:

Which of the following transactions does NOT involve a cash flow?

Which of the following is NOT classified as an investing activity?

Use the information below to answer the following question. What was the cash flow from investing activities?

Which of the following is classified under cash flow from operations?

The net profit reported on the income statement for the current year was $50 000. Depreciation on property, plant and equipment was $31 000. What is the amount of cash flows from operating activities that would appear on the statement of cash flows prepared using the indirect method?

Determine the cash received from customers on account during July, based on the following data.

Use the information below to answer the subsequent question. The amount of inventory purchased during the year was:

A summary of the entries in the Cash ledger account of Staple Ltd for the month of January was as follows: What were the receipts from customers of Staple Ltd?

Which of the following is NOT a financing cash flow?

A summary of the entries in the Cash ledger account of Staple Ltd for the month of January was as follows: What was the cash flow from investing activities of Staple Ltd?

Consider the following information for the year ended 30 June 2018. What was the amount of cash received from customers?

Which of the following is NOT an example of financing cash flows?

A summary of the entries in the Cash ledger account of Staple Ltd for the month of January was as follows: What were the payments to suppliers and employees of Staple Ltd?