U1 AOS 2 Cash Flow Statement

Question 1

What are the three main sections of a cash flow statement?

Answer 1

Operating activities, investing activities, and financing activities.

Question 2

True or False: The cash flow statement is used to assess a company’s liquidity, solvency, and financial flexibility.

Answer 2

True

Question 3

Fill in the blank: Cash flows from __________ activities include transactions related to the sale and purchase of physical and financial assets.

Answer 3

investing

Question 4

What is the primary purpose of the cash flow statement?

Answer 4

To provide information about cash inflows and outflows during a specific period.

Question 5

What is cash flow from operating activities?

Answer 5

Cash flow from operating activities refers to the cash generated or used by a company’s core business operations.

Question 6

True or False: Cash flow from operating activities includes cash received from the sale of long-term assets.

Answer 6

False

Question 7

Which of the following is NOT included in cash flow from operating activities? A) Depreciation expense B) Cash received from customers C) Cash paid for equipment

Answer 7

C) Cash paid for equipment

Question 8

What is the primary purpose of analyzing cash flow from operating activities?

Answer 8

To assess the company’s ability to generate cash from its core business operations and meet its financial obligations.

Question 9

What are financing activities in the context of cash flow?

Answer 9

Financing activities refer to the transactions that result in changes to the size and composition of the equity capital and borrowings of the entity.

Question 10

True or False: Cash inflows from issuing shares are considered cash flow from financing activities.

Answer 10

True

Question 11

Fill in the blank: Cash outflows for repaying loans are included in cash flow from _____________________.

Answer 11

financing activities

Question 12

Which of the following is NOT a cash flow from financing activities? A) Borrowing money B) Paying dividends C) Purchase of inventory

Answer 12

C) Purchase of inventory

Question 13

True or False: GST collected from customers is considered a cash inflow in the cash flow statement.

Answer 13

True

Question 14

Fill in the blank: The payment of GST to suppliers is recorded as a ______ in the cash flow statement.

Answer 14

cash outflow

Question 15

Multiple Choice: Which of the following is included in the operating activities section of the cash flow statement related to GST? A) GST paid B) GST received C) Both A and B

Answer 15

C) Both A and B