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In a statement of cash flows, payments to acquire treasury shares should be classified as cash
outflow from
a. Operating activities
b. Investing activities
c. Financing activities
d. Disbursement activites
11. All of the following is an example of cash flows from financing activities except:
a. Cash payments for amounts borrowed
b. Cash payments to settle obligations
c. Cash payments to acquire treasury shares
d. Cash receipts from issuing short or long term borrowings
12. Financing activities are the cash flows that result from transactions:
a. Between the entity and the owners
b. Between the entity and the creditors
c. Nontrade liabilities and equity of an entity
d. All of the above
13. These may be classified as financing cash flow because it is a cost of obtaining financial
resources:
a. Dividends and Interest
b. Ordinary Share and Preference Share
c. Dividends paid and Interest paid
d. Dividends received and Interest received
15. It is an equity instrument that is subordinate to all other classes of equity instruments
a. Ordinary Share
b. Preference Share
c. Dividends
d. Share Premium
16. Financial statements provide the following information except:
a. Articles of Incorporation
b. Assets, Liabilities & Equity
c. Income and Expenses
d. Cash flows
17. Which of the following is not required to be presented as a minimum information on the face
of the statement of financial position?
a. Investment property
b. Investment accounted under the equity method
c. Biological asset
d. Contingent liability
18. What are the two forms in presenting the statement of financial position?
a. Singular and bodied form
b. Report and account form
c. Mean and median form
d. Vertical and horizontal form
21. Financing activities include the cash flows from transactions involving __________ of an
entity.
a. Trade Liabilities and Trade Assets
b. Equity and Nontrade assets
c. Equity and Nontrade liabilities
d. Nontrade liabilities and Nontrade assets
22. Below are the examples of cash flows from financing activities, except..
a. Cash payments for amounts borrowed
b. Cash payments from issuance of ordinary and preference shares
c. Cash payments to acquire treasury shares
d. Cash payments by a lessee for the gain of the outstanding principal lease liability
23. What is the cash flow category for principal payments of short-term and long-term loans from
financial institutions made to acquire plant assets?
a. Operating activities
b. Investing activities
c. Financing activities
d. Lending activities
24. Below are some of the cash outflows from financing activities except…
a. Proceeds from borrowing
b. Repurchase of own stock
c. Paying back lenders (Principal only)
d. Payment of dividends
27. _____________ are the cash flows that results from transactions between the entity and its
owners and between the entity and its creditors.
a. Operating Activities
b. Investing Activities
c. Financing Activities
d. Borrowing Activities
29. Equity simply means “net assets”. As generally used, the term “net assets” represents
a. Retained earnings of an entity
b. Current assets less current liabilities
c. Total paid in capital of an entity
d. Total assets less total liabilities
31. It is a financial statement in the financing activity that focuses on how a firm raises capital and
pays it back to investors through the capital markets.
a. Statement of Shareholder’s equity
b. Balance Sheet
c. Cash Flow Statement
d. Income Statement
32. It is also called as current liabilities, it is a firm's financial obligations that are expected to be
paid off within a year.
a. Long Term Debt
b. Equity
c. Dividends
d. Short Term Debt
33. Which one of the following is/are categories of cash flows required to be shown on the
statement of cash flows?
a. Cash flows from operating activities
b. Cash flows from financing activities
c. Cash flows from investing activities
d. All of the above
34. If a company changes from offering 30 days' credit to customers to offering 50 days’ credit,
which of the following statements is correct?
a. Cash generated from operations will increase.
b. Cash generated from financing activities will decrease.
c. Cash generated from operations will decrease.
d. There will be no effect on the statement of cash flows
35. Which of the following would not be revealed by a company's statement of cash flows?
a. Whether the company has paid a dividend during the year
b. How the company has managed its working capital over the last financial year
c. Whether the company has exceeded its overdraft limit during the year
d. Whether the company has raised extra long-term funding during the year
36. Which of the following should NOT be included in the financing activities?
a. Cash effects of making loans and collecting loans granted.
b. Cash effects of transactions obtaining resources from owners.
c. Cash effects of borrowing money and repaying amounts borrowed.
d. Cash effects of acquiring and disposing of treasury shares.
37. When shares are issued in exchange for property, the best evidence of fair value might be any
of the following EXCEPT
a. The fair value of the property received.
b. The selling price of the shares in the recent transaction.
c. The price of the shares quoted on the stock exchange.
d. The average book value of outstanding shares.
38. Transaction costs that are directly attributable of the issuance of new shares should be
a. Expensed immediately.
b. Charged to retained earnings.
c. Deducted from equity.
d. Deducted from equity, net of any related income tax benefit
39. An entity shall report separately cash flows arising from investing and financing activities
using
a. Direct method.
b. Indirect method.
c. Either direct method or indirect method.
d. Neither direct method nor indirect method.
40. A cash dividend that is declared during an accounting period, to be paid in the next
accounting period, is presented in the current period as
a. A used of cash from operating activities
b. A noncash transaction presented in a separate schedule
c. A use of cash from financing activities
d. A use of cash from investing activities
42. Which of the following can be classified as cash outflows from financing activities?
a. Issuance of new stock
b. Acquisition of property, plant and equipment
c. Payment of dividends
d. Purchase of investments
43. What do you call the residual interest in the assets of an entity after deducting liabilities?
a. current assets
b. working capital
c. liabilities
d. equity
44. It is the amount reported in the balance sheet that usually reflects the number of shares issued
multiplied by the par value or stated value per share.
a. Paid-in capital b. Common stock
c. Retained earnings d. Total shareholders’ equity
45. The relationship and distinction between the amount of capital contributed or paid in by the
owners of the corporation relative to the amount the company has earned and retained in the
business is a significant one. Such disclosure helps
a. creditors and investors assess the long-term ability of a company to internally
finance its own operations
b. investors to know the solvency of a company
c. management to assess the performance of the company and the business in the future
d. none of the above
48. The following are examples of transactions and events included in the financing activities
section of statement of cash flow except;
a. acquisition of plant asset through issuance of common stock
b. purchase of treasury stock
c. the company issued bonds payable to a bank
d. payment of cash dividends to preferred and common stocks