1.

In a statement of cash flows, payments to acquire treasury shares should be classified as cash
outflow from
a. Operating activities
b. Investing activities
c. Financing activities
d. Disbursement activites

2. Cash payments to acquire equity investments are?

a. Cash outflows for Investing activities
b. Cash outflows for Financing activities
c. Cash inflows for Financing activities
d. Cash inflows for Financing activities

3. Cash receipts from issuing shares are?

a. Cash outflows for Investing activities
b. Cash outflows for Financing activities
c. Cash inflows for Financing activities
d. Cash inflows for Financing activities

4. Simply stated, equity means

a. Net assets
b. Capital
c. Investments
d. All of the above

5. All are included in reporting equity in balance sheet, except:

a. Retained earnings
b. Treasury stock
c. Contributed capital
d. Long term investment

6. Retained earning could be

a. Cumulative
b. Noncumulative
c. Appropriated/Unappropriated
d. Disclose

7. Retained earnings include all of the following, except:

a. Net income
b. Dividends
c. Prior period adjustments
d. Treasury stock

8. Which of the following is not a component of contributed capital?

a. Ordinary shares
b. Treasury shares
c. Preference share
d. Share premium

9. Par value of a stock is

a. the value of the stock.
b. the recommended selling price of the stock.
c. an arbitrary amount stated on the face of the stock.
d. the actual selling price of the stock.

10. Retained earnings represents:

a. the amount of liquid assets that are available to the stockholders.
b. the amount received in excess of the par value of the stock.
c. the amount of net income earned by the company not paid out as dividends.
d. a decrease in stockholders' equity.

11. All of the following is an example of cash flows from financing activities except:
a. Cash payments for amounts borrowed
b. Cash payments to settle obligations
c. Cash payments to acquire treasury shares
d. Cash receipts from issuing short or long term borrowings

12. Financing activities are the cash flows that result from transactions:
a. Between the entity and the owners
b. Between the entity and the creditors
c. Nontrade liabilities and equity of an entity
d. All of the above

13. These may be classified as financing cash flow because it is a cost of obtaining financial
resources:
a. Dividends and Interest
b. Ordinary Share and Preference Share
c. Dividends paid and Interest paid
d. Dividends received and Interest received

14. Which of the following is not an element of shareholder’s equity?

a. Appropriation reserve
b. Revaluation surplus
c. Capital stock
d. None of the above

15. It is an equity instrument that is subordinate to all other classes of equity instruments
a. Ordinary Share
b. Preference Share
c. Dividends
d. Share Premium
16. Financial statements provide the following information except:
a. Articles of Incorporation
b. Assets, Liabilities & Equity
c. Income and Expenses
d. Cash flows

17. Which of the following is not required to be presented as a minimum information on the face
of the statement of financial position?
a. Investment property
b. Investment accounted under the equity method
c. Biological asset
d. Contingent liability

18. What are the two forms in presenting the statement of financial position?
a. Singular and bodied form
b. Report and account form
c. Mean and median form
d. Vertical and horizontal form

19. When there is much variability, the operating cycle is measured at

a. The mean value
b. The median mode
c. Twelve months
d. Three years

20. Financial statements must be prepared at least

a. Annually
b. Quarterly
c. Semiannually
d. Every two years

21. Financing activities include the cash flows from transactions involving __________ of an
entity.
a. Trade Liabilities and Trade Assets
b. Equity and Nontrade assets
c. Equity and Nontrade liabilities
d. Nontrade liabilities and Nontrade assets

22. Below are the examples of cash flows from financing activities, except..
a. Cash payments for amounts borrowed
b. Cash payments from issuance of ordinary and preference shares
c. Cash payments to acquire treasury shares
d. Cash payments by a lessee for the gain of the outstanding principal lease liability

23. What is the cash flow category for principal payments of short-term and long-term loans from
financial institutions made to acquire plant assets?
a. Operating activities
b. Investing activities
c. Financing activities
d. Lending activities

24. Below are some of the cash outflows from financing activities except…
a. Proceeds from borrowing
b. Repurchase of own stock
c. Paying back lenders (Principal only)
d. Payment of dividends

25. Contributions/ Investments by owners

a. Cash inflows from investing activities
b. Cash inflows from financing activities
c. Cash outflows from investing activities
d. Cash outflows from financing activities

26. Financing Theories are derived from the following except

a. Equity capital
b. Borrowings
c. Non-operating assets
d. Both a and b

27. _____________ are the cash flows that results from transactions between the entity and its
owners and between the entity and its creditors.
a. Operating Activities
b. Investing Activities
c. Financing Activities
d. Borrowing Activities

28. The following examples are financing activities except

a. Cash receipts from issuing shares or other equity instruments, for example, issuance of common
and preferred stock.
b. Cash receipts from sales of equity or debt instruments and interest in joint venture.
c. Cash payments to amount borrowed.
d. Cash payments by a lessee for the reduction of the outstanding liability relating to a finance
lease.

29. Equity simply means “net assets”. As generally used, the term “net assets” represents
a. Retained earnings of an entity
b. Current assets less current liabilities
c. Total paid in capital of an entity
d. Total assets less total liabilities

30. Conceptually, revaluation surplus are

a. Assets
b. Neither assets nor liabilities
c. Part of shareholder’s equity
d. Liabilities

31. It is a financial statement in the financing activity that focuses on how a firm raises capital and
pays it back to investors through the capital markets.
a. Statement of Shareholder’s equity
b. Balance Sheet
c. Cash Flow Statement
d. Income Statement

32. It is also called as current liabilities, it is a firm's financial obligations that are expected to be
paid off within a year.
a. Long Term Debt
b. Equity
c. Dividends
d. Short Term Debt

33. Which one of the following is/are categories of cash flows required to be shown on the
statement of cash flows?
a. Cash flows from operating activities
b. Cash flows from financing activities
c. Cash flows from investing activities
d. All of the above

34. If a company changes from offering 30 days' credit to customers to offering 50 days’ credit,
which of the following statements is correct?
a. Cash generated from operations will increase.
b. Cash generated from financing activities will decrease.
c. Cash generated from operations will decrease.
d. There will be no effect on the statement of cash flows

35. Which of the following would not be revealed by a company's statement of cash flows?
a. Whether the company has paid a dividend during the year
b. How the company has managed its working capital over the last financial year
c. Whether the company has exceeded its overdraft limit during the year
d. Whether the company has raised extra long-term funding during the year

36. Which of the following should NOT be included in the financing activities?
a. Cash effects of making loans and collecting loans granted.
b. Cash effects of transactions obtaining resources from owners.
c. Cash effects of borrowing money and repaying amounts borrowed.
d. Cash effects of acquiring and disposing of treasury shares.
37. When shares are issued in exchange for property, the best evidence of fair value might be any
of the following EXCEPT
a. The fair value of the property received.
b. The selling price of the shares in the recent transaction.
c. The price of the shares quoted on the stock exchange.
d. The average book value of outstanding shares.

38. Transaction costs that are directly attributable of the issuance of new shares should be
a. Expensed immediately.
b. Charged to retained earnings.
c. Deducted from equity.
d. Deducted from equity, net of any related income tax benefit

39. An entity shall report separately cash flows arising from investing and financing activities
using
a. Direct method.
b. Indirect method.
c. Either direct method or indirect method.
d. Neither direct method nor indirect method.

40. A cash dividend that is declared during an accounting period, to be paid in the next
accounting period, is presented in the current period as
a. A used of cash from operating activities
b. A noncash transaction presented in a separate schedule
c. A use of cash from financing activities
d. A use of cash from investing activities

41. Which of the following would be classifies as a financing activity?

a. Purchase of treasury shares
b. Receipt of dividends
c. Sale of an investment in bonds
d. Purchase of a patent

42. Which of the following can be classified as cash outflows from financing activities?
a. Issuance of new stock
b. Acquisition of property, plant and equipment
c. Payment of dividends
d. Purchase of investments

43. What do you call the residual interest in the assets of an entity after deducting liabilities?
a. current assets
b. working capital
c. liabilities
d. equity
44. It is the amount reported in the balance sheet that usually reflects the number of shares issued
multiplied by the par value or stated value per share.
a. Paid-in capital b. Common stock
c. Retained earnings d. Total shareholders’ equity

45. The relationship and distinction between the amount of capital contributed or paid in by the
owners of the corporation relative to the amount the company has earned and retained in the
business is a significant one. Such disclosure helps
a. creditors and investors assess the long-term ability of a company to internally
finance its own operations
b. investors to know the solvency of a company
c. management to assess the performance of the company and the business in the future
d. none of the above

46. the amount of undistributed earnings of past periods is reported as

a. Paid-in capital b. Deficit
c. Retained Earnings d. Preferred stock

47. Financing activities

a. are transactions and events involving the purchase and sale noncurrent assets
b. includes those transactions and events that normally enter into the determination of
operating income
c. is an excess of dividends and losses over earnings that results in a negative retained
earnings balance
d. includes transactions and events whereby cash is obtained from owners and
creditors

48. The following are examples of transactions and events included in the financing activities
section of statement of cash flow except;
a. acquisition of plant asset through issuance of common stock
b. purchase of treasury stock
c. the company issued bonds payable to a bank
d. payment of cash dividends to preferred and common stocks