TRUE OR FALSE

A. If an entity has no items of other comprehensive income in any of the periods for which financial statements are presented it may present a statement of comprehensive income .

B. The statement of cash flows provides information about the changes in cash and cash equivalents of an entity for a reporting period, showing separately changes from operating activities, investing activities and financing activities

C. Disclosing information for the prior period as well as for the current period increases the usefulness of the financial statements as it enables comparisons to be made.

D. An entitys current account with a commercial bank has a balance of CU2,000. The balance is payable on demand and is available immediately without penalty. The CU2,000 in the current account is cashit is a demand deposit.

E. An entity that prepares its financial statements in compliance with the IFRS for SMEs Standard is required to present segment information and is required to present earnings per share. However, an entity that chooses to present either segment information or earnings per share, or both, is required to describe the basis for preparing and presenting that information.

F. Cash equivalents are :

they are short-term; they are highly liquid investments; they are readily convertible to known amounts of cash; and they are subject to an insignificant risk of changes in value

G. Transactions that do not involve a flow of cash and cash equivalents (non-cash transactions) are included in the statement of cash flows even when non-cash transactions are financing or investing activities (for example, when an entity acquires machinery on credit or the entity issues shares to its owner in exchange for a building contributed by the owner).

H. An entity has cash on a two-month fixed rate (5% per year) deposit with a commercial bank. If the entity withdraws the capital before it matures it forgoes an insignificant portion of the interest. On maturity the entity expects to use the proceeds to settle with its trade creditors

The fixed deposit is a cash equivalentit is short-term (two months from inception), highly liquid (can be withdrawn at any time), readily convertible into a known amount of cash (capital plus specified accrued interest) and subject to an insignificant risk of change in value (a fixed-interest-rate instrument with a two-month maturity is unlikely to change significantly in value in response to changes in market interest rates and the penalty for early redemption is insignificant). It is also intended to be used to meet short-term cash commitments