Accounting Practice Exam

Topics: Cash flow, Depreciation, Income statement Pages: 8 (757 words) Published: September 22, 2013
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.
Correct Answer:
  
useful life.

Question 8
1 out of 1 points

In a healthy business cash flow from operations will normally be: Answer

Selected Answer:
  
positive.
Correct Answer:
  
positive.

Question 9
1 out of 1 points

Company F received $20,000 in cash in repayment of a loan made to L Lee. In the statement of cash flows of Company F the $20,000 would appear as: Answer

Selected Answer:
  
an investing inflow.
Correct Answer:
  
an investing inflow.

Question 10
1 out of 1 points

Under the realisation convention income is regarded as realised when: Answer

Selected Answer:
  
all of the above.
Correct Answer:
  
all of the above.

Question 11
0 out of 1 points

On 31 December 2010 a new motor vehicle with a useful life of five years and an estimated residual value of $5,000 was purchased by a business at a cost of $25,000. The amount of depreciation expense charged for the six months ended 30 June 2011, using the straight-line method is: Answer

Selected Answer:
  
$4,000.
Correct Answer:
  
$2,000.

Question 12
0 out of 1 points

If $80,000 is owed by customers at the beginning of the year, $75,000 is owed at the end and credit sales are $120,000, the cash received from customers is: Answer

Selected Answer:
  
$115,000.
Correct Answer:
  
$125,000.

Question 13
1 out of 1 points

Wages expense in the income statement is $56,250 with the statement of financial position at the end of the year showing accrued wages of $2,000. If there were no accrued wages at the beginning of the period how much was paid out in cash for wages during the year? Answer

Selected Answer:
  
$54,250.
Correct Answer:
  
$54,250.

Question 14
0 out of 1 points

When preparing the note attached to the statement of cash flows reconciling operating profit with cash flow from operations which statement...
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