A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 15 - 16 of 50

Question 15

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Question

MCQ▾

What is a declaration date?

Choices

Choice (4)
a.The date on which company mails the checks to the record holder.
b.That date when the company closes its stock transfers books and makes up a list of the shareholders for payments of dividends
c.Date notified by the stock exchange as a date which will entail a buyer of shares, the dividend if bought before the ex-dividend date
d.The date on which board of directors declare dividend is called a declaration date

Answer

d.

Explanation

Declaration date is the date when the company announces the payment of next dividends. The declaration dates provide the information to investors for them to know if they are eligible for a dividend payment or not.

On the other hand, ex-date or ex-dividend date is the date after which the dividend is not allowed by the company to the new buyer of the stock.

Question 16

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Question

MCQ▾

Which of the following is not an example of investing activities?

Choices

Choice (4)
a.Sales of PPE, intangibles, and other long-term assets
b.Sales of equity or debt instruments of other entities.
c.Sale of goods and services.
d.Cash advances and loans.

Answer

c.

Explanation

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.

Examples:

  • Cash payments to obtain fixed assets also including intangibles.
  • Cash payments received from fixed assets sale including intangibles.

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