Question 3 (a) Indicate as X for each transaction, whether it is a source or use of cash. Identify also whether the transaction is an operating, investing or financing activities in the Statement of Cash Flow (SOCF) Source Use SOCF Category Increase in accounts receivables Pay bank note Issue ordinary shares Sell marketable securities Retire bonds Issue debentures Purchase equipment Purchase treasury shares Pay dividends Increase in accounts payable (15 marks) (b) Analyst must be familiar with the determination of income. Income reported for a business entity depends on proper recognition of revenues and expenses. In certain cases cost are recognised as expense but in other situations are capitalised. Required: (i) List five method of revenue recognition. (5 marks) (ii) Under what circumstances it is appropriate to capitalised cost? (5 marks) [Total : 25 Marks]