Slide chap 5

Question 1

Several entries in the income statement account do not involve movement of cash là?

Answer 1

Depreciation

Accruals and prepayments

Question 2

1 vài cash transactions have no impact on profit là?

Answer 2

Share issues

Purchase of fixed assets

Question 3

Net increase (or decrease) in cash and cash equivalents được tính như ren?

Answer 3

CF 
from operating activities + CF 
from investing activities + CF from financing activities

Question 4

Cash flow 
from operating activities là gì?

Answer 4

Arise from normal day-to-day trading activities

Question 5

Vd cho CF 
from operating activities

Answer 5

Cash received from customers - cash paid for expenses –

inventories, rents, wages, interest, tax, dividends,..

Question 6

Có bao nhiu cách để deduce net cash inflows from operating activities?

Answer 6

2 cách

• Direct method (Tổng hợp các hoá đơn và payments liên quan tới operating activities)
• Indirect method

Question 7

Nêu indirect method để deduce net cash inflows from operating activities?

Answer 7

Net profit before taxation
+ Depreciation expense
+ Interest expense
+ inventories (nếu giảm), - inventories (nếu tăng)
+ Trade receivables (nếu giảm), - (nếu tăng)
+ Trade payables (nếu tăng), - (nếu giảm)
- Interest paid
- Taxation paid
- Interest paid
- Dividend paid

Question 8

Cash flows from investing activities là chi?

Answer 8

• Cash payments to acquire non-current assets, and cash receipts from the disposal of non-current assets
• Also, cash flows from making new investments, or disposing of existing investments

Question 9

Cash flows from financing activities là chi?

Answer 9

• Cash received from share issues and long-term loans
• Repayment/redemption of shares and long-term loans
  (sự trả hết)

Question 10

Flora Ltd issued £100,000 shares during the year, £80,000 of which it used to repay a long-term loan.
Tính Cash inflow from financing activities

Answer 10

20000

Question 11

Cash là gì

Answer 11

Notes and coins in hand, and deposits in banks and similar institutions that are accessible on demand

Question 12

Cash equivalents là gì?

Answer 12

Short-term, highly liquid investments that are readily convertible to known amounts of cash

Question 13

Cash flow forecasts có gì?

Answer 13

anticipated inflows and outflows

Question 14

Consolidated accounts là gì?

Answer 14

• Combined results of relevant groups of medium and large companies
• Relevant companies include the parent or holding company and the subsidiaries
• Small companies are exempt from the requirement to produce consolidated accounts

Question 15

Each small company and the aggregate group satisfy 2 trong 3 criteria nào?

Answer 15

• Turnover not more than £6.5m
• Balance Sheet value not more than £3.26m
• Employees average not more than 50

Question 16

Subsidiary company/ Subsidiaries là gì?

Answer 16

• Công ty con
• Hơn 50% voting rights (ordinary shares) thuộc holding company
• Holding company control the board of director của subsidiaries

Question 17

Holding company là gì

Answer 17

Company with controlling interest in other companies

Question 18

Controlling interest là gì?

Answer 18

When a company holds > 50% of voting rights (ordinary shares)

Question 19

Means of controling interest?

Answer 19

• Right to appoint or remove directors holding a majority of the voting rights at board meetings
• Right to exercise a dominant influence

Question 20

Associate (cty liên kết) là gì?

Answer 20

• Có 20% - 50% voting rights
• Significant influence but not control
• Not consolidated in group accounts

Question 21

Joint ventures là gì? (cty liên doanh)

Answer 21

• Jointly owned by two or more companies

- Not consolidated in group accounts

Question 22

Types of group?

Answer 22

1/ Vertical
2/ Horizontal
3/ Conglomerate

Question 23

Vertical (theo chiều dọc) là chi?

Answer 23

Extract raw materials
Transport to manufacturing
Manufacturing
Distribution
Retailing

Question 24

Horizontal (theo chiều ngang) là chi?

Answer 24

Different industries united by a similar process or product

Question 25

Conglomerate là chi?

Answer 25

Strength from many different industries in different economic environments

Question 26

The need for group accounts?

Answer 26

• Central holding company means that economically there is only one real business entity
• Must look at total assets and liabilities under unified control
• Only looking at holding company may mislead about the strength of the group

Question 27

Rules for group accounting là chi?

Answer 27

• Each company retains legal independence
• For accounting purposes, the group is treated as a single economic entity
• Subsidiaries publish individual accounts
• Holding company publishes accounts for the group as a whole

Question 28

Consolidation là chi?

Answer 28

• Adds together various items in the income statements, and statements of financial position
• Inter group transactions and balances are cancelled

Question 29

Items requiring cancellation include:

Answer 29

Investment in subsidiaries
Loans to/from companies
Inter-company trading
Dividends paid to/from companies

Question 30

The part of the shares có được hoàn toàn owned by the holding company ko?

Answer 30

Ko
Vd H Ltd buys 80% of the share capital of S Ltd.
- There will be 20% owned by other parties – the minority interest

Question 31

Minority interest is shown in the consolidated statement of financial position to ?

Answer 31

• reflect the claim on assets belonging to the non-controlling shareholders
• minority interest is reported as a share of profit belonging to minority shareholders.

Question 32

Goodwill là gì?

Answer 32

Difference between value placed on a company (price paid), and the sum of the fair value of its assets and liabilities

Question 33

Nhịm vụ của goodwill?

Answer 33

1/ Recognises ‘the whole is greater than the sum of its parts’
2/ Recognises intangibles missing from the statement of financial position:
Managerial ability
Regional monopoly
Highly efficient workforce
Customer loyalty

Question 34

Goodwill ở đâu trong balance sheet?

Answer 34

Intangible non-current asset

Question 35

Goodwill is deemed to have a useful economic life and is amortised on a systematic basis over that period of time. True or false?

Answer 35

True

Question 36

Investing company should include its share of the earnings of the associate as part of the financial statements. True or false

Answer 36

True

Question 37

The share of transactions for the joint venture should be included in consolidated accounts. True or false

Answer 37

True
Included should be:
The assets controlled and the liabilities incurred
The expenses incurred and the income it earns