A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 23 - 24 of 50

Question 23

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Question

MCQ▾

ABC Company has paid annual dividends of $40,000. The beginning outstanding stock was 8000 and the ending outstanding stock was 14000. Calculate DPS of ABC Company?

Choices

Choice (4)
a.3.46
b.3.48
c.3.64
d.6.72

Answer

c.

Explanation

In this question, we can go for a simple average to find out the average outstanding shares.

The beginning outstanding stock was 8000 and the ending was 14000.

Using the simple average, we get the average outstanding stock as

The annual dividends paid were $40,000.

Using the DPS formula, we get –

Question 24

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Question

Match List-Ⅰ List-Ⅱ▾

Match the following activities of cash flow

List-Ⅰ (Column-I)List-Ⅱ (Column-I)
(A)
Payment of dividends
(i)
Investing activities
(B)
Purchase of fixed assets
(ii)
Investing activities
(C)
Repayment of bank loan
(iii)
Financing activities
(D)
Interest received
(iv)
Financing activities

Choices

Choice (4)
  • (A)
  • (B)
  • (C)
  • (D)
a.
  • (iv)
  • (ii)
  • (iii)
  • (i)
b.
  • (i)
  • (iii)
  • (ii)
  • (iv)
c.
  • (iv)
  • (i)
  • (iii)
  • (ii)
d.
  • (iv)
  • (iii)
  • (i)
  • (ii)

Answer

a.

Explanation

  • Investing activities- Investing activities will include the purchase and sale of long-term assets such as land, buildings, plant, and machinery etc. not held for resale. These activities will include the purchase and sale of such investments which are not included in cash equivalents. Cash flow from investing activities discloses the expenditure incurred for resources intended to generate future income and cash flows.
  • Financing activities- Financing activities result in change in the amount of capital and borrowings of a business. Examples of cash flows arising from financing activities are: Cash receipts from issuing shares or other similar instruments, cash receipts from issuing debentures, loans, notes, bonds, and other short-term borrowings etc.

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