Accounting Practice Exam

Question 1
0 out of 1 points

If the opening balance of equity is $45,000, the closing balance is $60,000 and profit is $27,000, calculate the amount of dividends paid which will appear as a financing outflow in the statement of cash flows.
Answer

Selected Answer: Nil.
Correct Answer: $12,000.

Question 2
1 out of 1 points

If 'other expenses' in the profit and loss report is $32,000 including $8,000 of depreciation, accrued 'other expenses' at the beginning of the year is $1,000 and 0 at the end of the year, the figure for 'other expenses' that will appear in the statement of cash flows for the year is:
Answer

Selected Answer: $25,000.
Correct Answer: $25,000.

Question 3
1 out of 1 points

Which of these factors could cause operating profit to be more than cash flow from operations?
Answer

Selected Answer: Both A and B.
Correct Answer: Both A and B.

Question 4
0 out of 1 points

If credit sales for the year are $120,000 and the accounts receivable balance has increased by $10,500 over the year how much cash was received from accounts receivable during the year?
Answer

Selected Answer: $10,500.
Correct Answer: $109,500.

Question 5
1 out of 1 points

Which item would not be included in the operating section of a statement of cash flows?
Answer

Selected Answer: Cash received from the sale of surplus machinery.
Correct Answer: Cash received from the sale of surplus machinery.

Question 6
1 out of 1 points

In the reconciliation attached to the statement of cash flows operating cash flow is reconciled to:
Answer

Selected Answer: operating profit after tax.
Correct Answer: operating profit after tax.

Question 7
1 out of 1 points

In calculating depreciation the life of an asset refers to its:
Answer

Selected Answer: useful life.