IAS 7 Statement Of Cash Flows

Question 1

Explain the purpose of the statement of cash flows

Answer 1

Explains why the cash balance, as reported in the statement of financial position, has changed over the year. It provides a summary of cash receipts and payments and groups together predefined categories.

Question 2

Define the term cash

Answer 2

Cash is bank/cash in hand, plus deposits, plus cash equivalents less overdraft

Question 3

Define the term cash equivalents

Answer 3

short term, highly liquid investments that are readily convertible to known amounts of cash and selling them would not restrict the ability of the business

Question 4

Operating activites

Answer 4

cash received from revenue productions activities, results from a profit or loss transaction

Question 5

Investing activites

Answer 5

acquisition or disposal of NCA, returners Received from investments, dividends and interest. Proceeds on disposal of existing assets

Question 6

Financing activities

Answer 6

receipts from or repayments to providers of finance, cash proceeds from share issue, repayment of borrowing