F3 (FA/FFA) – Chapter 24 – PART F – CBE MCQs – ACCA

These are ACCA F3 (FA/FFA) Financial Accounting MCQs for Part-F of the Syllabus “Preparing basic financial statements”.

These multiple-choice questions (MCQs) are designed to help ACCA F3 students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

  • Students should not attempt these MCQs until they have finished the entire chapter.
  • All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F3 (FA/FFA) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:ACCA – Associations of Chartered Certified Accountants
Fundamental Level:Knowledge, FIA – Foundation in Accounting
Subject:Financial Accounting
Paper:F3 – FA/FFA
Chapter:Statements of cash flows
Chapter Number:24 of the Practice and Exam Kit
Syllabus Area:F – “Preparing basic financial statements”
Questions Type:CBE MCQs
Exam Section:Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part F of the Syllabus; “Preparing basic financial statements” of ACCA F3 (FA/FFA) Financial Accounting Module.

Time

These MCQs are not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate

Result

Students will get their F3 CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “( select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

 

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F3 - Chapter 24 - Part A - MCQs

Course: ACCA - FIA
Subject:
F3 (FA/FFA) Financial Accounting
Syllabus Area: F - Preparing basic financial statements
Chapter in Kit: 24 - Statements of cash flows
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

  1. If you are using mobile, turn on the mobile rotation and solve the MCQs on wide screen for better experience.

REQUEST

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1 / 21

In preparing a company's statement of cash flows complying with IAS 7 Statements of Cash Flows, which, if any, of the following items could form part of the calculation of cash flow from financing activities?

  1. Proceeds of sale of premises
  2. Dividends received
  3. Bonus issue of shares

2 / 21

Which one of the following statements correctly identifies a valid disadvantage to users of financial statements of the statement of cash flows?

3 / 21

Which, if any, of the following items could be included in 'cash flows from financing activities' in a statement of cash flows that complies with IAS 7 Statement of Cash Flows?

  1. Interest received
  2. Taxation paid
  3. Proceeds from sale of property

4 / 21

The accountant of F Co is preparing the statement of cash flows using the direct method for reporting cash flows from operating The following information is available at 31 March 20X7.

What will be disclosed as cash receipts from customers in the statement of cash flows for the year ended 31 March 20X7?

5 / 21

Big Time Co had the following transactions during the year.

  • Purchases from suppliers were $18,500, of which $2,550 was unpaid at the year end. Brought forward payables were $1,000.
  • Wages and salaries amounted to $9,500, of which $750 was unpaid at the year end. The financial statements for the previous year showed an accrual for wages and salaries of $1,500.
  • Interest of $2,100 on a long term loan was paid in the year.
  • Sales revenue was $33,400, including $900 receivables at the year Brought forward receivables were $400.

Using the direct method, what is Big Time Co's cash flow from operating activities?

$         

6 / 21

IAS 7 requires the statement of cash flows to open with the calculation of net cash from operating activities, arrived at by adjusting net profit before taxation.

Which one of the following lists consists only of items which could appear in such a calculation?

7 / 21

Part of a company's draft statement of cash flows is shown below:

The following criticisms of the above extract have been made:

  1. Depreciation charges should have been added, not deducted.
  2. Increase in inventory should have been added, not deducted.
  3. Increase in accounts payable should have been deducted, not added.
  4. Proceeds of sale of non-current assets should not appear in this part of the statement of cash flows.

Which of these criticisms are valid?

8 / 21

Which of the following assertions about statements of cash flows is/are correct?

  1. A statement of cash flows prepared using the direct method produces a different figure for operating cash flow from that produced if the indirect method is used.
  2. Rights issues of shares do not feature in statements of cash flows.
  3. A surplus on revaluation of a non-current asset will not appear as an item in a statement of cash flows.
  4. A profit on the sale of a non-current asset will appear as an item under Cash Flows from Investing Activities in a statement of cash flows.

9 / 21

The following extract is taken from a draft version of company's statement of cash flows, prepared by a trainee accountant.

Net cash flow from operating activities

Four possible mistakes that may have been made by the trainee accountant are listed below.

  1. The profit on sale of property, plant and equipment should be subtracted, not added.
  2. The increase in inventories should be added, not subtracted.
  3. The decrease in trade and other receivables should be added, not subtracted.
  4. The increase in trade payables should be subtracted, not added.

Which of the four mistakes did the trainee accountant make when preparing the draft statement?

10 / 21

A company sold warehouse premises at a loss during a financial period.

How would this transaction be included in a statement of cash flows for the period that complies with IAS 7 Statement of Cash Flows and that uses the indirect method to present cash flows from operating activities?

11 / 21

Part of the process of preparing a company's statement of cash flows is the calculation of cash inflow from operating activities.

Which of the following statements about that calculation (using the indirect method) are correct?

  1. Loss on sale of non-current assets should be deducted from profit before interest and tax.
  2. Increase in inventory should be deducted from profit before interest and tax.
  3. Increase in payables should be added to profit before interest and tax.
  4. Depreciation charges should be added to profit before interest and tax.

12 / 21

Which one of the following statements is correct, with regard to the preparation of a statement of cash flows that complies with IAS 7 Statement of Cash Flows?

13 / 21

An extract from a statement of cash flows prepared by a trainee accountant is shown below.

Cash flows from operating activities

Which TWO of the following criticisms of this extract are correct?

14 / 21

Toots Co has made healthy profits for the past year, although at times the company has been close to running out of Because Toots Co is profitable, Adam, their accountant is unconcerned by the cash shortage. Jo, the financial controller at Toots Co, is concerned. Jo tells Adam, 'profits are fine on paper, but in the real world cash is king'. Jo believes Toots Co needs to take a more proactive approach to cash flow management.

Adam and Jo have two different views. Who is correct, and why?

15 / 21

Which of the following items appear in a company's statement of cash flows?

  1. Surplus on revaluation of non-current assets
  2. Proceeds of issue of shares
  3. Proposed dividend
  4. Irrecoverable debts written off
  5. Dividends received

16 / 21

The following information is available about the plant, property and equipment of Lok Co, for the year to 31 December 20X3.

Based on this information, what amount will be included for purchases of property, plant and equipment for the year, in a statement of cash flows that complies with IAS 7 Statement of Cash Flows?

$         

17 / 21

Which one of the following statements is correct?

18 / 21

In the course of preparing a company's statement of cash flows, the following figures are to be included in the calculation of net cash from operating activities.

What will the net effect of these items be in the statement of cash flows?

 

19 / 21

A draft statement of cash flows contains the following calculation of cash flows from operating activities:

Which of the following corrections need to be made to the calculation?

  1. Depreciation should be deducted, not added.
  2. Decrease in inventories should be added, not deducted.
  3. Decrease in receivables should be deducted, not added.
  4. Decrease in payables should be deducted, not added.

20 / 21

Which of the following items could appear in a company's statement of cash flows?

  1. Proposed dividends
  2. Rights issue of shares
  3. Bonus issue of shares
  4. Repayment of loan

21 / 21

The following extract is from the financial statements of Pompeii, a limited liability company at 31 October:

What is the cash flow from financing activities to be disclosed in the statement of cash flows for the year ended 31 October 20X9?

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