ICAEW Accounting IAS 07 MCQ with ANS
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College of management sciences Address: C-4 Sector, 14-A, Shadman, North Nazimabad Town, Karachi, Pakistan. Phone: 021-36952901 , Fax: 021-36952902, Mobile: 0320-2500828, Email: [email protected] , web: www.coms.edu.pk [email protected] (Sir Haris) ----------------------------------------------------------------------------------------- Teacher M.Haris ICAEW Accounting Knowledge Level IAS 07 ( Statement of cash flow) MCQs 1. Which TWO of the following transactions would be presented in a statement of cash flows, according to IAS 07 Statement of cash flows? A. Conversion of loans into shares B. Loan interest received C. Loan interest owed D. Proceeds of loan issue 2. Which ONE of the following items should be presented under Cash flows from investing activities, according to IAS 07 Statement of cash flows? A. Employee costs B. Property revaluation C. Redemption of debentures D. Development costs capitalised in the period 3. Which ONE of the following items should be presented under Cash flows from financing activities, according to IAS 07 Statement of cash flows? A. Employee costs B. Property revaluation C. Redemption of debentures D. Development costs capitalised in the period 4. Which ONE of the following items should be presented under Cash flows from operating activities, according to IAS 07 Statement of cash flows? A. Employee costs B. Property revaluation C. Redemption of debentures D. Development costs capitalised in the period 5. Which TWO of the following can be classified as Cash and cash equivalents under IAS 07 Statement of cash flows? A. Redeemable preference shares due in 180 days B. Loan notes held due for repayment in 90 days C. Equity investments D. A bank overdraft
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Transcript of ICAEW Accounting IAS 07 MCQ with ANS
College of management sciencesAddress: C-4 Sector, 14-A, Shadman, North Nazimabad Town, Karachi, Pakistan.Phone: 021-36952901 , Fax: 021-36952902, Mobile: 0320-2500828, Email: [email protected], web:www.coms.edu.pk [email protected] (Sir Haris)-----------------------------------------------------------------------------------------Teacher M.HarisICAEW Accounting Knowledge Level
IAS 07 ( Statement of cash flow) MCQs
1. Which TWO of the following transactions would be presented in a statement of cash flows, according to IAS 07Statement of cash flows?
A. Conversion of loans into sharesB. Loan interest receivedC. Loan interest owedD. Proceeds of loan issue
2. Which ONE of the following items should be presented under Cash flows from investing activities, according toIAS 07 Statement of cash flows?
A. Employee costsB. Property revaluationC. Redemption of debenturesD. Development costs capitalised in the period
3. Which ONE of the following items should be presented under Cash flows from financing activities, according toIAS 07 Statement of cash flows?
A. Employee costsB. Property revaluationC. Redemption of debenturesD. Development costs capitalised in the period
4. Which ONE of the following items should be presented under Cash flows from operating activities, accordingto IAS 07 Statement of cash flows?
A. Employee costsB. Property revaluationC. Redemption of debenturesD. Development costs capitalised in the period
5. Which TWO of the following can be classified as Cash and cash equivalents under IAS 07 Statement of cashflows?
A. Redeemable preference shares due in 180 daysB. Loan notes held due for repayment in 90 daysC. Equity investmentsD. A bank overdraft
6. In accordance with IAS 7 Statement of cash flows, and treating it as a nonrecurring event, which classification ofthe cash flow arising from the proceeds from an earthquake disaster settlement would be most appropriate?(select one answer)
A. Cash flows from operating activitiesB. Cash flows from investing activitiesC. Cash flows from financing activitiesD. Does not appear in the cash flow statement
7. In accordance with IAS 7 Statement of cash flows, and treating it as a nonrecurring event, which classification ofthe cash flow arising from the proceeds of sale of a subsidiary would be most appropriate? (select one answer)
A. Cash flows from operating activitiesB. Cash flows from investing activitiesC. Cash flows from financing activitiesD. Does not appear in the cash flow statement
8. In accordance with IAS 7 Statement of cash flows, and treating it as a nonrecurring event, which classification ofthe cash flow arising from the disposal proceeds of a major item of plant would be most appropriate? (select oneanswer)
A. Cash flows from operating activitiesB. Cash flows from investing activitiesC. Cash flows from financing activitiesD. Does not appear in the cash flow statement
Good Luck
Sir Haris
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Answers according to IAS 07 guideline.
Question 1 - B & D
The only cash flows arise from the loan interest received and proceeds of loan issue. The other two items do notmeet the definition of cash flows per IAS 7 para 6.
Question 2 - D
Development costs capitalised are cash flows from investing activities per IAS 7 para 16(a). Employee costs arecash flows from operating activities per IAS 7 para 14(d). Property revaluation does not appear in the cash flowstatement as it does not involve an inflow or outflow of cash. Redemption of debentures appears in cash flowsfrom financing activities perIAS 7 para 17(c).
Question 3 - C
Redemption of debentures are cash flows from financing activities per IAS 7 para 17(c).Employee costs are cash flows from operating activities per IAS 7 para 14(d). Development costs capitalised arecash flows from investing activities per IAS 7 para 16(a). Property revaluation does not appear in the cash flowstatement as it does not involve an inflow or outflow of cash.
Question 4 - AEmployee costs are cash flows from operating activities per IAS 7 para 14(d). Redemption of debentures appears incash flows from financing activities per IAS 7 para 17(c). Development costs capitalised are cash flows frominvesting activities per IAS 7 para 16(a). Property revaluation does not appear in the cash flow statement as itdoes not involve an inflow or outflow of cash.
Question 5 - B & D
The bank overdraft is negative cash. Cash equivalents include items of short maturity (loan notes held are assets).See IAS 7 paras 6-8.
Question 6 - A
The definition in IAS 7 para 6 of operating activities includes "other activities that are not investing or financing",so will include disaster settlements.
Question 7 - B
Cash flows re acquisitions and disposals of subsidiaries are investing activities per IAS 7 para 39.
Question 8 - B
Sales proceeds from non-current assets come under investing activities per IAS 7 para 16(b).
