F1 Financial Reporting

Welcome to your FR Statement of Cash flows

1. 
[IAS 7]

Which two of the following would be recognised as cashflows from operating activities?

2. 
[IAS 7]

Which one of the following would be recognised as cash outflows in accordance with IAS 7?

3. 
[IAS 7]

Which three of the following would be classified under ‘cash flows from operating activities’ in line with IAS 7?

4. 
[IAS 7]

Which three of the following would be classified under financing activities in line with IAS 7?

5. 
[IAS 7]

Accrued interest payable b/f was £48,000.
During the year interest payable of £164,000 was charged to the SoPL. If the accrued interest balance c/f at the end of the year was £145,000. How much interest paid should be shown on the cash flow?

6. 
[IAS 7]

Which two of the following would be recognised as cash outflows from financing activities – IAS 7?

7. 
[IAS 7]

Which three of the following would be listed under cashflows from investing activities? IAS 7

8. 
[IAS 7]

Which three of the following would appear in cash flows from operating activities using the DIRECT method? IAS 7

9. 
[IAS 7]

IAS 7 Statement of cash flows sets out the three main headings to be used in a statement of cash flows. Items that may appear on a statement of cash flows include:
i) Tax paid
ii) Purchase of investments
iii) Loss on disposal of machinery
iv) Purchase of equipment
Which of the above items would be included under the heading “Cash flows from operating activities” according to IAS 7?

10. 
[IAS 7]

The following is an extract from the statement of cash flows for QW for the year ended 31 December 20X1:
                                                                       $m
Cash flows from operating activities            950
Cash flows from investing activities         (1,130)
Cash flows from financing activities             120
                                                                    –––––
Net cash flow for the year                            (60)
Cash and cash equivalents at start of year  650
                                                                     –––––
Cash and cash equivalents at end of year    590
                                                                     –––––
Based on the information provided, which one of the following independent statements would be a reasonable conclusion about the financial adaptability of QW for the year to 31 December 20X1?

11. 
[Ratios]

KL operates in the fashion wholesale business and its management team has become increasingly concerned about the liquidity of the entity. It has asked you for your opinion and you have calculated the following ratios to help you with your assessment:
                                                    30 June 20X3      30 June 20X2
Inventory holding period                128 days       77 days
Receivables collection period           88 days      87 days
Payables payment period               170 days     118 days
Current ratio                                          1.3:1            2.1:1   
Quick ratio                                             0.7:1            1.4:1
Which one of the following is NOT a valid statement about the ratios shown above?

12. 
[IAS 7]

Cash generated from operations in the statement of cash flow is considerably lower thanthe profit from operations recorded in the statement of profit or loss.
Which of the following could be possible reasons for this?
(i) A non‐current asset has been sold during the year at a large profit
(ii) A large payable was paid off just before year end
(iii) A large sale was made just before year end, resulting in many lines being out of stock at the year‐end date
(iv) Purchase of new premises during the year has led to an increase in the depreciation charge

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