A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 48 - 49 of 50

Question 48

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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

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Question

MCQ▾

Following is the information from the books of JKL ltd.

Following is the information from the books of JKL ltdFollowing is the information from the books of JKL ltd
ParticularsPurchases $Sales $
Machinery Building Investment Goodwill Patents and trademarks12,500 25,000 1,250 1,750 2,5001,25,000 - 1,750 - 500

Choices

Choice (4)
a.$86,750
b.$80,000
c.$40,000
d.$68,750

Answer

a.

Explanation

Following is the information from the books of JKL ltdFollowing is the information from the books of JKL ltd
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 1,7501,27,250--————————–---40,500
Cash flow from investing activities86,750

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