Organizer : Corporate Finance Institute
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Where would accounts payable most likely appear in set of financial statements?*
10 points
In the balance sheet under ‘non-curent liabilities’
In both the income statement and the balance sheet
In the balance sheet under ‘current liabilities‘
In the income statement before operating profit
The purpose of the income statement is to:*
10 points
Show where the business’s cash has come from and where it has been spent
To give a detailed breakdown of key items shows in the primary financial statements
show the revenues, expenses and operating profit for the financial year
What is the definition of a non-current asset?*
10 points
An asset intended for use on a continuing basis in the company’s activities
Expenditure made to fulfil a revenue obligation
An asset purchased for resale
Within how many months of the balance sheet date is a current liability usually payable?*
10 points
24 months
12 months
1 months
4 months
What is the principal purpose of charging depreciation on non-current assets?*
10 points
To spread the coast of the assets over their estimated useful lives
To show the assets at their market value in the balance sheet
To ensure thats sufficient funds are available to replace the assets
A piece of manufacturing equipment was purchased at the beginning of 2021 for an original cost of
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$50,000. Over it’s useful life, the equipment is expected to produce 40,000 widgets as follows:
2021: 4,000 units
2022: 10,000 units
2023: 12,000 units
2024: 8,000 units
2025: 6,000 units
The asset can be salvaged for 10% of its original cost at the end of 2025. The usage of the asset varies over time and is dependent on the output. What is depreciation expense for 2025?
*
10 points
$6,750
$7,500
$4.500
$5,000
The purpose of the cash flow statement is to:
*
10 points
Show, at a particular date, the sources of funds provided to a business by shareholders and others and how these funds have been used
Show the revenues, expenses and operating profit for the financial year
Show where the business’s cash has come from and where it has been spent
To give a detailed breakdown of key items shown in the primary financial statements
If Beta Limited has opening PP&E balance of 150, a depreciation expense of 75, and a closing PP&E balance of 170, what is Beta’s net capital expenditure (or CAPEX)?
*
10 points
395
55
95
245
If ABC Inc. buys a piece of equipment for $50,000, will use it in the business for 5 years and in 5 years expects to sell it for $10,000. What should ABC Inc. show in its cash flow statement in the year of purchase?
*
0 points
$50,000 cash outflow under investing activities
$42,000 cash outflow under investing activities
$8,000 cash inflow under investing activities
$8,000 cash outflow under investing activities