A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 6 - 7 of 50

Question 6

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Question

MCQ▾

The following is the position of current assets and current liabilities of Z ltd:

The following is the position of current assets and current liabilities of Z ltdThe following is the position of current assets and current liabilities of Z ltd
19951996
Provision for doubtful debts$1,000-
Short-term loans10,00019,000
Creditors15,00010,000
Bills payable20,00040,000

The company incurred a loss of $45,000 during the year. What will be the cash flow from operating activities?

Choices

Choice (4)
a.-32000
b.-22000
c.+22000
d.-24000

Answer

b.

Explanation

The following is the position of current assets and current liabilities of Z ltdThe following is the position of current assets and current liabilities of Z ltd
Net loss for the year Adjustments for: Less decrease in provision for doubtful debt Operating loss before working capital changesCash used or lost in operating activities Add: Increase in current liabilities: Short-term loans Bills payable Less: Decrease in current liabilities: Creditors$ 9,000 20,000$ - (45000) - (1000) - (46000) - (17000) - (22000) +29000 -5000

Question 7

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Question

MCQ▾

Calculate retained earnings from the following data:

Beginning retained 150000

Net income 10000

Dividend 1500

Choices

Choice (4)
a.130000
b.158500
c.135800
d.150000

Answer

b.

Explanation

Retained earnings formula is calculated that derives from the balance in the retained earnings account as the end of a reporting period. Retained earnings is that portion of the profits of a business that have not been distributed to shareholders instead, it is retained for investments in working capital and/or fixed, as well as to pay down any outstanding liabilities.

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