The Statement Of Cash Flows

This question bank verified by Studydeets

Questions Bank

An Overview of the International External Reporting Environment
The Conceptual Framework of Accounting and Its Relevance to Financial Reporting
Theories of Financial Accounting
An Overview of Accounting for Assets
Depreciation of Property, Plant and Equipment
Revaluations and Impairment Testing of Non-Current Assets
Inventory
Accounting for Intangibles
An Overview of Accounting for Liabilities
Accounting for Leases
Share Capital, Reserves and Share Options Employee Bonus Schemes
Accounting for Financial Instruments
Revenue Recognition Issues
The Statement of Comprehensive Income and Statement of Changes in Equity
Accounting for Income Taxes
The Statement of Cash Flows
Events Occurring After the Reporting Date
Related-Party Disclosures
Earnings Per Share
Further Consolidation Issues I: Accounting for Intragroup Transactions
Further Consolidation Issues II: Accounting for Non-Controlling Interests
Further Consolidation Issues III: Accounting for Indirect Ownership Interest
Accounting for Foreign Currency Transactions
Translating the Financial Statements of Foreign Operations
Accounting for Corporate Social Responsibility

All Questions

Question 1

Free

True/False

A reporting entity is required to prepare a statement of cash flows that is in accordance with the requirements of IAS 7 and shall be presented as an integral part of the notes to the accounts.

Choose correct answer/s

True

False

Check answer

Question 2

Free

True/False

In accordance with IAS 7 Statement of Cash Flows,cash payments to suppliers for goods and services are classified as cash flows from operating activities.

Choose correct answer/s

True

False

Check answer

Question 3

Free

True/False

In accordance with IAS 7 Statement of Cash Flows,dividends paid may be classified as an investing or a financing cash flow.

Choose correct answer/s

True

False

Check answer

Question 4

Free

True/False

In accordance with IAS 7 Statement of Cash Flows,cash receipts from sales of property,plant and equipment are classified as cash flows from operating activities.

Choose correct answer/s

True

False

Check answer

Question 5

Free

True/False

A statement of cash flows is a forecast of net cash flows from operating,investing and financing activities.

Choose correct answer/s

True

False

Check answer

Question 6

True/False

While the statement of cash flows is presently required along with the accrual statements,taking a balanced view,it would be sufficient to meet the accountability needs of general purpose financial statement users on its own.

Choose correct answer/s

True

False

To unlock the question

Question 7

True/False

The statement of cash flows should be subdivided into selling,financing and investing categories.

Choose correct answer/s

True

False

To unlock the question

Question 8

True/False

If a business consistently has positive cash flows from financing and negative cash flows from investing and operating activities,this is a positive sign for the business.

Choose correct answer/s

True

False

To unlock the question

Question 9

True/False

IAS 7 requires disclosures about non-cash financing and investing activities.

Choose correct answer/s

True

False

To unlock the question

Question 10

True/False

To calculate the cash flow from the issue of debentures,the face value of the debentures would have to be adjusted by deducting any premium or adding any discount on issue.

Choose correct answer/s

True

False

To unlock the question

Question 11

True/False

Sharma (1996)argues that cash flows from operating activities divided by current debt should replace the current ratio as a measure of liquidity.

Choose correct answer/s

True

False

To unlock the question

Question 12

True/False

In accordance with IAS 7,non-cash investing and financing transactions are required to be included in the statement of cash flows.

Choose correct answer/s

True

False

To unlock the question

Question 13

True/False

All cash flows from investing and financing activities are required to be reported on a gross basis.

Choose correct answer/s

True

False

To unlock the question

Question 14

True/False

Entities are encouraged to report their operating cash flows using the direct method.

Choose correct answer/s

True

False

To unlock the question

Question 15

True/False

Both IASB and FASB propose that financial statements should be presented in a more aggregated manner.

Choose correct answer/s

True

False

To unlock the question

Question 16

Multiple Choice

IAS 7 defines cash equivalents to include:

Choose correct answer/s

highly liquid investments with short periods to maturity that are readily convertible to cash on hand at the investor's option and are subject to an insignificant risk of changes in value.

term borrowing.

working capital items such as prepayments and accruals.

highly liquid investments with short periods to maturity that are readily convertible to cash on hand at the investor's option and are subject to an insignificant risk of changes in value and term borrowing.

To unlock the question

Question 17

Multiple Choice

Accounts that represent cash or cash equivalents include:

Choose correct answer/s

bank overdrafts.

accounts receivable.

short-term money market deposits.

bank overdrafts and short-term money market deposits.

To unlock the question

Question 18

Multiple Choice

IAS 7 states that for a money market deposit to be classified as cash:

Choose correct answer/s

It must normally have a maturity of 3 months or less from the date of acquisition.

It must be scheduled to mature within the operating cycle of the entity.

It must normally mature 3 months or less from balance date.

It must be within 1 month of maturing at balance date.

To unlock the question

Question 19

Multiple Choice

An item considered to be a cash equivalent in one company may not be considered as such in another.This is because:

Choose correct answer/s

The operating cycle varies between companies.

Companies have different balance dates and this will affect the measurement of the term to maturity.

Companies use highly liquid items for purposes other than as part of their cash-management function.

The working capital management policies of companies vary so an item may be considered very liquid in one company and not in another.

To unlock the question

Question 20

Multiple Choice

Investing activities are defined by IAS 7 as those that:

Choose correct answer/s

relate to the changing size or composition of the capital management structure of the entity.

relate to the acquisition or disposal of inventory.

relate to the acquisition and/or disposal of non-current assets and other investments not included in cash equivalents.

relate to changes in capital or liabilities used to fund long-term assets.

To unlock the question