Chapter 14: Statement of cash flows construction

Which of the following categories is not used to classify cash flows in the statement of cash flows? (Difficulty: Easy)
1. Managing activities
2. Operating activities
3. Investing activities
4. Financing activities
Activities that involve providing and collecting cash as a lender or as an owner of shares and acquiring and disposing of fixed assets are included in which section of the statement of cash flows? (Difficulty: Easy)
1. Operating activities
2. Investing activities
3. Financing activities
4. Managing activities
Which of the following items will not appear in the cash flow from operating activities section when using the direct method? (Difficulty: Moderate)
1. Payments to employees
2. Payments to suppliers
3. Net income
4. Collections from customers
Which of the following items is not considered as cash or cash equivalent? (Difficulty: Moderate)
1. Cash on hand
2. Demand deposits
3. Bank borrowings
4. Investments with a maturity of two months from the date of acquisition
All of the following would be included in a company’s operating activities except: (Difficulty: Moderate)
1. Income tax payments
2. Collections from customers
3. Cash payments to suppliers
4. Dividend payments
Which of the following items is not a non-cash item? (Difficulty: Moderate)
1. Depreciation expense
2. Amortization expense
3. Reversal of provision
4. Income tax payment
Given the following data:
o 135 was raised from the issue of shares in cash (66 of share capital and 69 of share premium);
o Bonds were converted into capital for 30 (share capital of 16 plus share premium of 14);
o Bonds were repaid at face value at maturity for 60;
o Dividends were paid in cash for 8;
What is the amount of the cash flow from financing activities? (Difficulty: Moderate)
1. 135
2. -60
3. 67
4. -8
Which of the following transactions does not decrease cash? (Difficulty: Easy)
1. Purchasing inventory for cash.
2. Accruing operating expenses.
3. Paying trade accounts payable.
4. Purchasing securities that are not cash equivalents.
Which of the following transactions increase(s) cash? (Difficulty: Easy)
1. Sales of goods and services for cash.
2. Receiving dividends.
3. Collection of accounts receivable.
4. All of these.
Which of the following transactions do(es) not affect cash? (Difficulty: Moderate)
1. Purchasing inventory on credit.
2. Accruing operating expenses.
3. Reclassifying long-term debt to short-term debt.
4. All of these.

Chapter 14: Statement of cash flows construction

Quiz