Which of the following is not a financing activity on the statement of cash flows?

Chapter 13 - Multiple choice quiz

1.	The basis of measurement used in the statement of cash flows is: Inhaltsverzeichnis Show Chapter 13 - Multiple choice quiz What are financing activities on the statement of cash flows? Which is not a financing activities?

An item or transaction will qualify for classification as a cash equivalent:

A.	only if it has a maturity of less than three months;

B.	if it has a remaining term of more than three months but no more than six months;

C.	its term to maturity is no greater than twelve months;

D.	it has a fixed maturity date of greater than twelve months.

The following items are classified as cash equivalents:

B.	highly liquid investments readily convertible to cash;

C.	non-current investments held in foreign banks;

D.	shares held in an associated company.

For cash flow reporting purposes, operating activities include:

A.	buying and selling of non-current assets;

B.	incurring and extinguishing equity and debt;

C.	acquisition and disposal of investments;

D.	activities not otherwise classified as financing and investing.

Which of the following descriptions best describes cash flows from investing activities? Those activities that relate to:

A.	changing the size or financial structure of an entity;

B.	altering the composition of the debt of an organisation;

C.	the acquisition or disposal of non-current assets;

D.	restructuring the working capital components of a business.

The following would be included amongst cash flows from financing activities:

A.	selling or otherwise disposing of inventory for cash;

B.	changing the size of total equity by issuing new shares for cash;

C.	paying creditors of a business;

D.	purchasing a new building for cash.

The following activities would be presented amongst the cash flows from operating activities on a statement of cash flows.

	I	II	III	IV
Receipts from customers	Yes	Yes	Yes	No
Dividends received	Yes	Yes	No	No
Income taxes paid	Yes	No	Yes	No
Proceeds from borrowing	No	No	No	Yes

Cash flows from the following activities would be presented amongst the investing activities on a statement of cash flows.

	I	II	II	IV
Payments to suppliers	Yes	No	Yes	No
Interest received	Yes	No	Yes	No
Property acquired	Yes	Yes	No	No
Investments sold	No	Yes	No	Yes

Cash flows from the following activities would be presented amongst the financing activities on a statement of cash flows.

	I	II	III	IV
Issue of shares and other equity	Yes	Yes	Yes	No
Redemption of debentures	Yes	No	Yes	No
Payment of dividends	No	Yes	Yes	No
Dividend income	Yes	No	No	Yes

10.

For the purpose of presentation in a statement of cash flows, government taxes on the income of a business entity are regarded as:

B.	an investing activity;

C.	an operating activity;

D.	a non-cash item to be disclosed in the notes.

11.

The statement of cash flows presentation method that separates gross cash inflows from cash outflows is known as the:

12.

Greta Limited had net profit of $33 000 during the financial year. Included in profit was a depreciation expense of $14 000. Across the year Accounts receivable increased by $11 000 and Accounts payable increased by $5 000. The amount of cash flow from operating activities is:

13.

Stanton Stationery Limited had a net profit after tax of $50 000 for the financial year. Included in this profit was a depreciation expense of $10 000 and a gain on sale of Investments of $2 000. Accounts Receivable increased by $3 000; Inventories increased by $1 000 and Accounts Payable increased by $6 000. The cash flow from operating activities amounted to:

14.

During the financial year Sugar Limited had sales of $420 000. The opening balance of Accounts receivable was $90 000, and the closing balance was $127 000. Bad debts amounting to $7 000 were written off during the period. The cash receipts from sales during the year amounted to:

15.

During the financial year, Huang Limited has a Cost of Goods Sold amounting to $294 000. Opening balances were: Inventory $36 000; Accounts Payable $28 000. Closing balances were: Inventory $45 000; Accounts Payable $26 000. A discount of $1 000 for prompt payment was received. The amount of cash paid for goods purchased during the year was:

16.

Bright Limited has the following ledger account balances: Income tax payable Opening balance $52 000; Closing balance $33 000. The amount of tax expense accrued at the end of the year was $ 28 000. The amount that has been paid during the year to the taxation authorities for incomes taxes is:

17.

The following items could be included in the closing cash balance that is presented in the balance sheet of Mohammed Limited:

	I	II	III	IV
Cash and cheques on hand	Yes	Yes	Yes	No
Accounts receivable	No	Yes	No	No
Short-term money market deposits	Yes	No	Yes	Yes
Prepayments	No	No	Yes	Yes

18.

When presenting the reconciliation note of operating profit and cash flows from operating activities:

A.	Increases in current assets during the year should be added back from the reconciliation

B.	Increases in current liabilities during the year should be added back from the reconciliation

C.	Dividend revenue should be deducted from the reconciliation where dividends received have been classified as operating cash flows.

D.	Dividend revenue should be deducted from the reconciliation where dividends received have been classified as financing cash flows.

19.

The following item would appear in a statement of cash flows:

A.	conversion of equity to debt;

B.	recognition of leased assets;

C.	acquisition of equipment in exchange for debentures;

D.	proceeds from the settlement of a court case.

20.

The appropriate presentation treatment for non-cash investing and financing transactions is to:

A.	show them in the statement of cash flows after the disclosure of the ending balance of cash;

B.	present them in the statement of cash flows above the operating activities;

C.	exclude them from the statement of cash flows;

D.	exclude them from the investing and financing sections and include them in the operating section.

This is the end of the test. When you have completed all the questions and reviewed your answers, press the button below to grade the test.

What are financing activities on the statement of cash flows?

The financing activity in the cash flow statement focuses on how a firm raises capital and pays it back to investors through capital markets. These activities also include paying cash dividends, adding or changing loans, or issuing and selling more stock.

Which is not a financing activities?

This activity includes principal payments to lenders and vendors for most capital purchases, as well as the cost to issue debt. Interest payments are operating activities, not finance activities.

Which of the following is not a financing activity on the statement of cash flows?

Chapter 13 - Multiple choice quiz

What are financing activities on the statement of cash flows?

Which is not a financing activities?

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