IFRS Quiz: Statement Of Cash Flows


The preparation of the statement of cash flows sounds easy, but it is always the last of the primary statements to be prepared and can give rise to the most questions from users. Test yourself against PwC's statement of cash flows specialist, Tak Yano, with this IFRS quiz. You might also want to read our topic summary on statement of cash flows to improve your chances of a better score.

Q1: What is the principle in IAS 7 for the classification of cash flows?

(a) Cash flows should be classified according to the nature of the activity in a manner that is most appropriate to the business; or

(b) Cash flows in IAS 7 should be classified consistently with the classification of the related item in the statement of financial position.

Q2: : Which criterion is not included in the definition of cash equivalents under IAS 7?

(a) subject to an insignificant change in value;

(b) short-term, highly liquid investments;

(c) investment in high-quality instruments; or

(d) readily convertible to known amounts of cash.

Q3: Which of the following should be shown as cash and cash equivalents within the consolidated statement of cash flows?

(a) a deposit in an escrow account, access to which requires a third party's signature;

(b) restricted funds that are not available for use in the short-term and can be used only for specific capital payments; or

(c) cash balance held by a subsidiary that cannot be transferred to other parts of the group because of exchange controls.

Q4: Where can interest paid be classified?

(a) financing activities;

(b) operating activities;

(c) operating or financing activities; or

(d) operating, investing or financing activities.

Q5: Which of the following expenditures should not be classified as cash flows from investing activities?

(a) payments to acquire property, plant and equipment;

(b) payments to acquire intangible assets; Or

(c) payments for research or exploration.

Q6: Which of the following statements is false?

(a) Cash flows from derivatives held for dealing or trading purposes are classified as operating activities;

(b) Cash flows from derivatives that are accounted for as hedges under IAS 39 are classified in the same manner as the hedged transactions; or

(c) Cash flows from commodity derivatives held as economic hedges that do not meet the criteria for hedge accounting in IAS 39 are classified under financing activities.

Q7: Where is cash acquired in a business combination classified?

(a) operating activities;

(b) investing...

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