3 Changes in non-current liabilities and equity in the balance sheet appear in the statement of cash flows under:

the reconciliation of operating profit with cash flow from operating activities.

operating activities.

investing activities.

financing activities.

4 The section of the statement of cash flows that is generally considered to be the best measure of a companys ability to generate cash is:

each section gives an equal estimation.

cash flows from operating activities.

cash flows from financing activities.

cash flows from investing activities.

5 In which section of the statement of cash flows would the purchase of new machinery be included?

Cash flows from operating activities.

Cash flows from investing activities.

Cash flows from financing activities.

Purchases of new equipment items are not included in the statement of cash flows.

6 Which of the following information can be obtained from a statement of cash flows but is not obvious from looking at financial statements prepared on an accrual basis?

Whether the entity is collecting its receivables in a timely manner.

Whether the entity is generating cash from its operations.

7 Which of these is not an example of cash or cash equivalents?

Money market deposit with 6 months maturity.

Bank overdraft.

Bank and non-bank bills.

Bank deposits.

Whether the entity is likely to be able to pay its debts as and when they fall due.

All the options listed are true.