Quiz 3

Attempt 1:
1: Statement of income – gross profit

Increase in capital shares – cash inflow
Buying equipment – cash outflow
Statement of financial position – liabilities
Adjustments in non-cash working capital accounts – inventories
2: When looking at all the changes in the statements of financial position
between two years the sources must always match the uses of cash.
A: True
3: If a house account goes from $200,000 to $230,000, it is considered a
cash outflow.
A: True
4: Profit for the year is presented in the statement of cash flows as an
“operating activity”.
A: True
5: A decrease in share capital and long-term borrowing accounts are
considered cash inflows.
A: False
6: An increase in a company’s trade and other payables is considered a cash
outflow and presented in the statement of cash flows under the heading
“financing activities”.
A: False
7: A decrease in adjustments in non-cash working capital accounts shown in
the statement of cash flows is considered a cash inflow
______________________.
A: inflow
8: Which of the following is considered a cash outflow?
A: an increase in trade and other payables between two consecutive
accounting periods
A: an increase in inventory
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10: Which of the following is included in non-cash working capital accounts?
A: inventories
11: One business has purchased another business. What type of activity has
occurred?
A: an investing activity
12: Which heading on the statement of cash flows shows the payment of
dividends?
A: financing activities
13: How is depreciation shown on the statement of cash flows?
A: as cash inflow under operating activities
14: ______________________ for the year is a major source included in the
section operating activities.
A: net profit
15:
Profit before taxes $46,000
Net profit for the year 34,000
Depreciation 40,000
Adjustments in non-cash working capital accounts 17,000 outflow
Using the information above, what was the change in cash flow under
operating activities?
A: an increase of $57,000
16: A company has the following information. What is the impact on cash as
shown in the statement of cash flows?
Cash at beginning of year $10,000
Cash at end of year $50,000
Operating activities increased cash by $56,000
Financing activities decreased cash by $10,000
A: cash increased by $40,000
17: Which of the following scenarios represents a cash outflow?
A: the mortgage payable account decreases by $30,000
18: Which of the following is shown as an operating activity in the statement
of cash flows?
A: depreciation
19: Which of the following is a cash inflow?
A: a decrease in a non-cash asset account
20: The ______________________ activities section of the statement of cash
flows includes accounts such as share capital and long-term borrowings.
A: financing
21: The profit for the year is the amount drawn from the statement of
______________________ that is included in the operating section in the
statement of cash flows.
A: income
ATTEMPT 2:
1: Financing activities – dividends
Operating activities – depreciation
Investing activities – buildings
Statement of income – salaries
Working capital activity – income
2: When looking at all the changes in the statements of financial position
between two years the sources must always match the uses of cash.
A: True
3: Both profit for the year and the sale of investment securities are
considered a cash inflow.
A: True
4: Payment of dividends is presented in the statement of cash flows under
the section “financing activities”.
A: True
5: The only financial statement that is required to do the statement of cash
flows is the statement of financial position.
A: False
6: Reducing a mortgage account from one period to the next is considered a
cash outflow.
A: True
7: Buying a building would be considered a cash outflow
_____________________ and presented in the statement of cash flows as an
investing activity.
A: outflow
8: ______________________ activities such as share capital appearing on the
statement of cash flows are usually cash inflows.
A: financing
9: The ______________________ amount is the number drawn from the
statement of retained earnings that is included in the financing section of the
A: payment of dividend
10: What does cash from investing activities include?
A: Cash from/to all capital assets items
11: What adjustments are made to calculate cash flow from operating
activities?
A: Depreciation is added back to net profit for the year
12:
2013 2012
Trade receivables $45,000 $35,000

Prepaid expenses 160,000 170,000
Short-term loan 40,000 35,000
Long-term debt 70,000 60,000
According to the above information, which of the following is a cash outflow?

A: trade receivables
A: an increase in inventory
14: If depreciation expense is $38,000, how will it be shown on the statement
of cash flows?
A: Depreciation will be shown in operating activities as an increase in cash of
$ 38,000.
15: Which of the following is an operating activity?
A: short-term borrowings
16: What source of financing is shown under financing activities?
A: issuing share capital to buy land
17: The profit for the year is the amount drawn from the statement of
______________________ that is included in the operating section in the
A: income
18:
Profit before taxes $46,000
Net profit for the year 34,000
Depreciation 40,000
Adjustments in non-cash working capital accounts 17,000 outflow
Using the information above, what was the change in cash flow under
operating activities?
A: an increase of $57,000
19: ______________________ for the year is a major source included in the
section operating activities.
A: net profit
20: Which of the following is shown as an investing activity in the statement
of cash flows?
A: the purchase of equipment
21: Which heading on the statement of cash flows shows the purchase of
non-current assets?
A: investing activities
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Attempt 1:

1: Statement of income – gross profit

Trade receivables $45,000 $35,000

According to the above information, which of the following is a cash outflow?

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