FR D Preparing single entity financial statements

In the indirect method, what is added back to profit before tax when calculating operating cash flow?

• 1 Purchases of assets
• 2 Depreciation
• 3 Dividends paid
• 4 Interest received

In a statement of cash flows, dividends paid are classified as:

• 1 Operating activities
• 2 Not included
• 3 Investing activities
• 4 Financing activities

An increase in inventories during the year has what effect on operating cash flow?

• 1 It is shown as investing
• 2 It reduces operating cash flow
• 3 It has no effect
• 4 It increases operating cash flow

Which statement reconciles opening and closing equity?

• 1 The statement of cash flows
• 2 The statement of changes in equity
• 3 The notes
• 4 The statement of financial position

A statement of financial position does not balance. What is the best first step?

• 1 Look for items posted to only one side
• 2 Adjust equity
• 3 Delete the largest balance
• 4 Change the closing inventory

Which item appears in investing activities?

• 1 Payment of dividends
• 2 Purchase of property, plant and equipment
• 3 Issue of shares
• 4 Repayment of a loan