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quiz review Tutorial work - 7, 9 - 11

Accounting For Decision Making (Griffith University)

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 Question 1
1 out of 1 points
The primary objective of the statement of cash flows is to show the profit or loss on operating, investing and
financing activities.

Selected Answer:
False

Answers: True

False

 Question 2
1 out of 1 points
The direct method of preparing a statement of cash flows is the method that calculates cash flow from
operations by adjusting profit or loss for the effects of transactions of a non-cash nature.

Selected Answer:
False

Answers: True

False

 Question 3
0 out of 1 points
A net cash outflow from investing activities indicates that a business:

Selected Answer:

has paid off the mortgage payable

Answers: has paid off the mortgage payable

is purchasing more new non-current assets than it is selling old non-current

assets

is selling off its non-current assets

has made a profit

 Question 4
1 out of 1 points
Changes in the balance sheet items making up non-current liabilities and equity appear in the
_____________ section of the statement of cash flows.

Selected Answer:

Financing activities

Answers: Operating activities

Investing activities

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Financing activities

Reconciliation

Do not appear as they are non-cash

items

 Question 5
1 out of 1 points
The format followed in the preparation of the statement of cash flows is:

Selected Answer:

operating activities, investing activities, financing

activities
Answers: financing activities, operating activities, investing
activities

operating activities, investing activities, financing

activities

investing activities, financing activities, operating

activities

operating activities, financing activities, investing

activities

 Question 6
1 out of 1 points
Investing activities include

Selected Answer:

collecting cash on loans previously made.

Answers: repaying money previously borrowed.

obtaining capital from owners.

obtaining cash from creditors.

collecting cash on loans previously made.

none of the above

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 Question 7
1 out of 1 points
Buying a motor vehicle for cash is classed as which activity in the statement of cash
flows?

Selected Answer:

Investing
Answers: Operating

Investing

Financing

Non-cash

None of the above

 Question 8
1 out of 1 points
The primary purpose of the statement of cash flows is to

Selected
Answer:
provide information about the cash receipts and cash payments made during the
accounting period.

Answers: show the deficit of cash during the period.

show the cash balance at the end of the period.

provide information about the profit or loss during the accounting period.

provide information about the cash receipts and cash payments made during the
accounting period.

reconcile the cash flow from operations with profit

 Question 9
1 out of 1 points
Which of the following would NOT be classified as a cash flow from investing activities?

Selected Answer:

proceeds from a loan from the bank

Answers: proceeds from repayment of loans to other
parties

proceeds from the sale of plant and equipment

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proceeds from a loan from the bank

payment for plant and equipment

 Question 10
1 out of 1 points
In which section of the statement of cash flows would the payment of a dividend by a company to its
shareholders be included?

Selected Answer:

financing activities
Answers: operating activities

investing activities

financing activities

would not be included

 Question 11
0 out of 1 points
Which of these is an early warning sign indicating problems with cash flows?

Selected Answer:

Cash from operating activities is higher than profit

Answers: Cash from operating activities is higher than profit

Dividends paid are greater than cash flow from operations

A large amount has been spent on the acquisition of fixed assets

Proceeds from financing activities are used to finance investment

activities

All of the above

 Question 12
1 out of 1 points
Cash received from the issue of shares will appear in which section of the cash flow
statement?

Selected Answer:

financing activities section

Answers: investing activities section

operating activities section

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financing activities section

does not appear in the

statement

 Question 13
1 out of 1 points
In the cash flow statement the total of net cash flows from operating activities, net cash flows from
investing activities and net cash flows from financing activities for the period, equals:

Selected Answer:

total net increase or decrease in cash held for the

period.
Answers:

total net increase or decrease in cash held for the

period.

the cash balances at the end of the period.

the cash balances at the beginning of the period.

profit.

 Question 14
1 out of 1 points
An example of a non-cash investing or financing transaction is:

Selected Answer:

the purchase of a building paid for by an issue of shares direct to the

vendor.
Answers: charging depreciation.

repayment of a loan.

the purchase of a building paid for by an issue of shares direct to the

vendor.

sale of a parcel of shares.

 Question 15
1 out of 1 points
Which of the three main financial statements was chronologically the last to be required to be included
as part of the external financial reports?

Selected Answer:

Cash flow statement

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Answers: Balance sheet

Income statement

Cash flow statement

None, all three reports have always been required to be included in external
financial reports.

 Question 16
1 out of 1 points
The cash flow statement must include a note reconciling:

Selected Answer:

profit and cash flow from operations.

Answers: opening equity with closing equity.

profit and cash flow from operations.

the business bank balance with the bank statement

balance.

accrual accounting and historical cost accounting.

 Question 17
1 out of 1 points
Baltimore Company had a long-term debt of $1,000,000. To extinguish this debt the company issued
$1,000,000 of fully paid shares to the lender. This transaction would have the following impact on the
cash flow statement:

Selected Answer:

nil impact. This is a non-cash transaction.

Answers: decrease cash by $1,000,000.

nil impact. This is a non-cash transaction.

increase cash flow from financing activities by

$1,000,000.

increase cash by $1,000,000.

 Question 18
1 out of 1 points
Which one is a cash transaction?

Selected Answer:

payment of a dividend to shareholders.

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Answers: depreciation expense on motor vehicle.

payment of a dividend to shareholders.

declaration of a dividend by the

directors.

All are cash transactions.

 Question 19
1 out of 1 points
Depreciation of plant and equipment will appear in which section of the cash flow
statement?

Selected Answer:

does not appear in the statement

Answers:

does not appear in the statement

investing activities section

financing activities section

operating activities section

 Question 20
1 out of 1 points
In a healthy business cash flow from operations will normally be:

Selected Answer:

positive.
Answers: less than the
profit.

positive.

negative.

none of the above

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