Multiple Choice Questions $(10$ Marks$)$

$1.$ Which of the following activities is classified as an operating activity under IAS $7?$

a$)$ Purchase of machinery

b$)$ Issuance of shares

c$)$ Sale of goods

d$)$ Repayment of loans

$2.$ Which method of preparing the statement of cash flows starts with net income and adjusts for changes in balance sheet accounts?

a$)$ Direct method

b$)$ Indirect method

c$)$ Cumulative method

d$)$ Comprehensive method

$3.$ Which of the following cash flows is NOT included in investing activities?

a$)$ Purchase of property, plant, and equipment

b$)$ Proceeds from the sale of investments

c$)$ Interest received

d$)$ Dividend payments

$4.$ Which of the following statements about cash equivalents is true?

a$)$ They are readily convertible to a known amount of cash

b$)$ They have a maturity of more than three months

c$)$ They include equity investments

d$)$ They are subject to significant risk of changes in value

$5.$ Which of the following is an example of a financing activity under IAS $7?$

a$)$ Payment of interest

b$)$ Issuance of debt

c$)$ Receipt of dividends

d$)$ Purchase of inventory