A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 48 - 49 of 50
Question 48
Question MCQ▾
Which of the following is not included in cash flow statement?
Choices
Choice (4) | |
---|---|
a. | Interest received |
b. | Dividend received |
c. | Proceeds from issue of share capital |
d. | Return on Capital employed |
Answer
d.Explanation
Cash flow discloses changes in cash position. Sound cash position means sound funds position as inflow of cash necessarily involves inflow of funds. In case of cash flow statements an increase in the current liability or decrease in current assets result in increase in cash and vice versa. Inflows and outflows of cash is classified into the following categories:
- Operating Activities
- Investing Activities
- Financing Activities
Classification of all activities into these three categories helps the users of cash flow to assess the effect of these activities on the cash and cash equivalents of an enterprise.
Question 49
Question MCQ▾
Following is the information from the books of JKL ltd.
Particulars | Purchases $ | Sales $ |
Machinery Building Investment Goodwill Patents and trademarks | 12,500 25,000 1,250 1,750 2,500 | 1,25, 000 - 1,750 - 500 |
Choices
Choice (4) | |
---|---|
a. | $ 86,750 |
b. | $ 80,000 |
c. | $ 40,000 |
d. | $ 68,750 |
Answer
a.Explanation
Cash Flow from Investing activities | $ | |
Add: … … … … … Less: | Sale of Machinery 1,25, 000 Sale of Investment 1,750 Sale of Patent and Trademarks 500 … Purchase of machinery 12,500 Purchase of building 25,000 Purchase of investments 1,250 Purchase of goodwill 1,750 | 1,27, 250 … … … … … … 40,500 |
Cash flow from investing activities | 86,750 |