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WorksheetsStatement of Cash Flows Quiz
Total questions: 12
Worksheet time: 7mins
What is the primary purpose of the Statement of Cash Flows?
To show the financial position of a company at a specific point in time.
To provide information on the sources and utilization of cash during the period.
To summarize a company's revenues, expenses, and net income over a period.
To detail changes in owner's equity.
Cash inflows and outflows in the Statement of Cash Flows are categorized into which three activities?
Sales, Purchases, and General.
Assets, Liabilities, and Equity.
Operating, Investing, and Financing.
Production, Distribution, and Administration.
Which of the following activities affect income and expenses?
Investing activities
Financing activities
Operating activities
Non-cash activities
Which of these is an example of an Operating Activity?
Cash payments for the acquisition of property, plant, and equipment.
Cash receipts from the sale of goods and rendering of services.
Cash receipts from investments of the owner to the business.
Repayment of loans.
The acquisition and disposal of Property, Plant, and Equipment (PPE) are classified under which type of activity?
Operating activities
Investing activities
Financing activities
Production activities
Which of the following is an example of a Financing Activity?
Cash payments for purchases of inventory.
Cash receipts from sales of property, plant, and equipment.
Cash payments on drawings by owner.
Cash receipts from interest income.
According to the provided guidelines, what is a crucial criterion for a transaction to be included in the Statement of Cash Flows?
It must be a large transaction.
It must affect income.
It must affect cash.
It must be a non-cash transaction.
Cash flows from operating activities can be presented using which two methods?
Accrual method or Cash method
Direct method or Indirect method
Revenue method or Expense method
Assets method or Liabilities method
Under the indirect method for operating activities, how are non-cash expenses (e.g., Depreciation) treated?
Deducted from profit (loss).
Added to profit (loss).
Ignored as they do not affect cash.
Reported as a separate investing activity.
Under the indirect method for operating activities, how are increases in operating current assets (e.g., Increase in accounts receivable) treated?
Added (direct relationship).
Deducted (inverse relationship).
Ignored as they are current assets.
Treated as non-cash income.
T-Rex Café has the following information for the period related to its operating activities, using the indirect method:
Profit (loss) for the period: P50,000
Depreciation expense (non-cash): P10,000
Increase in accounts receivable: P5,000
Decrease in inventory: P3,000
Increase in accounts payable: P2,000
Requirement: Calculate the Net cash from operating activities using the indirect method.
Show your solution.
Velociraptor Motor Shop's financial records show the following for the year ended December 31, 2024:
Net Income (Profit) for the period: P120,000
Amortization expense (non-cash): P8,000
Gain on sale of equipment (non-cash income): P4,000
Increase in Prepaid Expenses: P6,000
Decrease in Accounts Payable: P9,000
Increase in Unearned Revenue (a liability): P3,500
Requirement: Calculate the Net Cash from Operating Activities for the year ended December 31, 2024, using the indirect method.
Show your solution.
