AAT Cash Flow Statement Quiz (20 Questions)

What is the main purpose of a statement of cash flows?

• Show profit for the year

• Show cash inflows and outflows

• Show assets and liabilities

• Show retained earnings

IAS 7 requires which of the following?

• Only large companies prepare cash flow statements

• Only listed companies prepare them

• Most companies must include a cash flow statement

• Only banks prepare them

Which of the following is NOT a limitation of profit figures?

• Subject to estimates

• Based on judgement

• Shows actual cash movement

• Can be manipulated

Which activity includes day-to-day trading?

• Investing

• Financing

• Operating

• Capital

Which of the following is an operating activity?

• Issue of shares

• Purchase of machinery

• Payment to suppliers

• Loan repayment

Depreciation is:

• A) A cash outflow

• B) Added back in operating activities

• C) Deducted as investing activity

• D) Ignored completely

Why is depreciation added back?

• It increases profit

• It is a financing item

• It is non-cash

• It is paid in cash

A gain on disposal of PPE is:

• Added

• Deducted from profit

• Ignored

• Treated as financing

An increase in inventory will:

• Increase cash

• Decrease cash

• Have no effect

• Increase profit only

An increase in receivables means:

• Cash has increased

• Cash has decreased

• No change

• Profit decreases