Other Economics Answers

Which of the following is the adjustment that is added during the reconciliation of net income to operating cash flows in indirect method?

Select one:

a. Gain on sale of capital assets

b. Amortization Expense

c. An increase in Accounts Receivable

d. An increase in Prepaid Expenses

The purchasing of a motor vehicle for R40 000 cash results in a ______ in the cash flow statement.

Select one:

a. increase in fixed assets

b. increase in cash from financing activities

c. decrease in cash from investing activities

d. decrease in cash from operating activities

Operating activities can be described as_______.

Select one:

a. the activities that result in changes in the size and composition of the contributed equity and borrowing of the entity

b. the principles revenue -producing activities of the entity and other activities that are not investing or financing activities

c. the acquisition and disposal of long-term assets and other investments not included in cash equivalents

d. includes changes in equity

When cash flow statement is prepared by using indirect method, which part of it is different from the direct method?

Select one:

a. Cash flow from operating activities

b. Cash flow from financing activities

c. Cash flow from investing activities

d. All parts are same in both methods

Which option is not a category of cash flows required to be shown on the statement of cash flows?

Select one:

a. Cash flows from taxation.

b. Cash flows from operating activities.

c. Cash flows from financing activities.

d. Cash flows from investing activities.

Identify the statement that is likely to be true, for a company making profits?

Select one:

a. Retained profits at the year-end will be greater than shareholders' equity.

b. The operating profit will be less than the profit for the year.

c. The profit for the year will be greater than the gross profit.

d. Retained profits at the year-end will be greater than retained profits at the beginning of the year.

What relationship exists between the average collection period and accounts receivable turnover?

Select one:

a. As average collection period increases (decreases) the accounts receivable turnover decreases (increases).

b. Both ratios are expressed in number of days.

c. Both ratios are expressed in number of times receivables are collected per year.

d. There is a direct and proportional relationsh

Identify the correct definition of unsecured debenture.

Select one:

a. Debenture secured by either movable or immovable assets. The debenture holder has the right to claim repayment from the proceeds of the sale of assets.

b. Debentures may be redeemed prior to the maturing date.

c. Debentures that are not secured by any asset. The debentures holders have the same rights as any other creditor on the case of liquidation.

d. Debenture holders have the option to convert their debenture into specific shares after a specified period.

Which item may be of concern when analysing the cash flow from investing activities?

Select one:

a. Payments of dividends.

b. Acquisitions of equipment, sale of property and purchase of equity securities

c. Decreasing accounts receivable.

d. Increasing inventories.

Which group of ratios measure how effectively the firm is using its assets?

Select one:

a. Coverage ratios

b. Liquidity ratios

c. Profitability ratios

d. Debt ratios