Chapter 12 Cash Flow Statements – Test

VCE ACCOUNTING
UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS
CHAPTER 12 – CASH FLOW STATEMENTS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
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Chapter 12 Test – Cash Flow Statements
Name ___________________________________________
Circle the correct response for each question:
1. (a) (b) (c) (d)
2. (a) (b) (c) (d)
3. (a) (b) (c) (d)
4. (a) (b) (c) (d)
5. (a) (b) (c) (d)
6. (a) (b) (c) (d)
7. (a) (b) (c) (d)
8. (a) (b) (c) (d)
9. (a) (b) (c) (d)
10. (a) (b) (c) (d)
11. (a) (b) (c) (d)
12. (a) (b) (c) (d)
13. (a) (b) (c) (d)
14. (a) (b) (c) (d)
15. (a) (b) (c) (d)
16. (a) (b) (c) (d)
17. (a) (b) (c) (d)
18. (a) (b) (c) (d)
19. (a) (b) (c) (d)
20. (a) (b) (c) (d)
21. (a) (b) (c) (d)
22. (a) (b) (c) (d)
23. (a) (b) (c) (d)
24. (a) (b) (c) (d)
25. (a) (b) (c) (d)
Total /25 marks

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Chapter 12 Test – Cash Flow Statements
1. Cash flows from Operating Activities arise from:
a) The provision of goods and services in the day-to-day operations of the business
b) The sale and purchase of non-current assets
c) Changes in the firm’s financial structure
d) All of the above
2. Cash flows from Investing Activities arise from:
d) All of the above
3. Cash flows from Financing Activities arise from:
d) All of the above
4. A business purchased stock for $10,000 (plus $100 GST) and office furniture for $5,000 (plus
$500 GST). Both items were paid in full. The cash flows from this transaction can be classified
as:
Stock purchase Office furniture purchase GST paid
a) Operating Investing Operating
b) Operating Operating Operating
c) Investing Investing Operating
d) Investing Operating Not a cash transaction
5. A business made a cash sale of $1,500 (plus $150 GST). The cost of the sale was $700. The cash
flows from this transaction can be classified as:
Cash sale GST collected Cost of sale
a) Operating Operating Operating
b) Operating Operating Not a cash transaction
c) Operating Not a cash transaction Not a cash transaction
d) Operating Financing Operating
6. A business repaid its bank $900 – $800 was repayment of the loan principal and $100 was
interest charged by the bank. The cash flows from this transaction can be classified as:
Loan repayment Interest paid
a) Financing Financing
b) Operating Operating
c) Operating Financing
d) Financing Operating

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7. A business paid its advertising expense for the month for $900 plus $90 GST. On the same day
the firm settled its GST liability with the government by paying $600. The cash flows from this
transaction can be classified as:
Advertising expense GST paid GST settlement
a) Operating Operating Investing
b) Operating Operating Operating
c) Operating Operating Financing
d) Operating Investing Operating
8. A business received $11,000 in the form of a loan from ABC Bank. The funds were used to
purchase a new computer system for $10,000 plus $1,000 GST. The cash flows from this
transaction can be classified as:
Loan Computer system GST paid
a) Financing Financing Operating
b) Investing Investing Investing
c) Financing Investing Operating
d) Financing Investing Investing
The owner of a small business has extracted the following information from the books of their
business for the current period. At the beginning of the period the firm’s bank balance was $22,000.
$
Cash sales 65000
Payments to creditors 25000
Cost of sales 28000
Wages 11000
Receipts from debtors 9000
Advertising 4000
Cash drawings 6000
GST received from customers 7000
Interest expense 1000
GST paid to suppliers 3000
Purchase of delivery van 15000
9. The Net Cash Flow from Operating Activities for the period is:
a) $9,000
b) $33,000
c) $38,000
d) $37,000
10. The firm’s bank balance at the end of the period is:
a) $59,000
b) $10,000
c) $38,000
d) $53,000

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The following transactions occurred for a small business during the year ended 31 March 2015. At
the beginning of the period the firm had a bank overdraft of $1,700.
$ $
Cash collected from debtors 33600 Sale of office furniture for cash 300
Purchase of office equipment for cash 6800 Loss on sale of office furniture 400
Sale of computer for cash 900 Sale of vehicle for cash 3800
Profit on sale of computer 300 GST paid 1600
Cash purchase of fittings 5300 Purchase of furniture for cash 3700
Cash drawings 5400
11. The Net Cash Flow from Investing Activities for the period is:
a) $10,800
b) ($10,900)
c) $10,900
d) ($10,800)
a) $17,500
b) $15,800
c) $14,000
d) $14,100
The following cash flows relate to a small business for the year ended 31 December 2015. At the
beginning of the period the firm had a bank balance of $3,500.
$
Capital contributions 14800
Cash sales 86000
Creditor payments 44100
Drawings of cash 11200
GST paid 7100
GST received 8600
Interest paid 1400
Loan from NPC 13500
Loan repayments 5100
Purchase of vehicle 29000
Wages 22900
13. The Net Cash Flow from Financing Activities for the period is:
a) ($1,500)
b) $23,200
c) $10,600
d) $12,000

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a) $2,100
b) $4,100
c) $10,700
d) $5,600
The following extracts from cash journals come from the books of a small trading business. The
firm’s bank balance on 1 May 2015 was $14,300.
Cash Receipts Journal
Date Details Receipt
No.
Bank Discount
Expense
Debtors
Control
Cost of
Sales
Sales Sundries* GST
Mar 31 Totals 35560 150 1080 2720 5950 28050 630
* Sundries includes the following items:
Loan from EZ Finance 17000
Commission 350
Capital 4800
Sale of van 5900
Cash Payments Journal
Date Details Chq.
No.
Bank Discount
Revenue
Creditors
Control
Stock
Control
Drawings Wages Sundries* GST
May 31 Totals 18734 80 1740 1800 1820 3180 9250 1024
* Sundries includes the following items:
Shop fittings 5400
Loan repayment 810
Computer 2150
Advertising 700
Cleaning 190
a) ($1,044)
b) ($694)
c) ($624)
d) ($154)

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16. The Investing Activities section of the Cash Flow Statement will look like:
a)
Cash Flow Statement (Extract) for the month ended May 31st
2015
$ $
Cash Flows from Investing Activities
Sale of van 5900
Purchase of shop fittings (5400)
Purchase of computer (2150)
Purchase of stock (1800)
Net Cash Flows from Investing Activities (3450)
b)
2015
$ $
Sale of van 5900
c)
2015
$ $
Sale of van 5900
Receipts from debtors 930
d)
2015
$ $
Sale of van 5900
Net Cash Flows from Investing Activities 500

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a) $19,170
b) $14,370
c) $19,980
d) $2,170
18. The closing section of the Cash Flow Statement will look like:
a)
2015
$ $
Net increase (decrease) in cash held 16896
Cash at beginning of period 14300
Cash at end of period 31196
b)
2015
$ $
c)
2015
$ $
d)
2015
$ $

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The following Statement of Receipts and Payments has been submitted by the owner of a small
business.
Statement of Receipts and Payments for year ended March 31st
2015
$ $
Cash Receipts
Cash sales 88500
Collections from debtors 31000
Sale of delivery truck 6000
Capital 5500
Commission revenue 2000
Loan from ABA Bank 12500
GST collected 9050 154550
Cash Payments
Cash purchases of stock 53500
Interest 1500
Advertising 6000
Cartage inwards 1000
Purchase of office equipment 12500
Wages 30500
Loan repayments 4500
Drawings 17000
Purchase of delivery truck 24500
GST paid 9750 160750
Excess (deficit) of receipts over payments (6200)
Bank balance as at 1 April 2014 9800
Bank balance as at 31 March 2015 3600
19. The Financing Activities section of the Cash Flow Statement will look like:
a)
2015
$ $
Cash Flows from Financing Activities
Capital 5500
Loan repayments -4500
Drawings -17000
Net Cash Flows from Financing Activities -3500

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b)
2015
$ $
Capital 5500
Loan repayments (4500)
Drawings (17000)
Net Cash Flows from Financing Activities (3500)
c)
2015
$ $
Capital 5500
Interest paid (1500)
Drawings (17000)
Net Cash Flows from Financing Activities (5000)
d)
2015
$ $
Sale of delivery truck 6000
Capital 5500
Drawings (17000)
Net Cash Flows from Financing Activities 2500

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20. The Operating Activities section of the Cash Flow Statement will look like:
a)
2015
$ $
Cash Flows from Operating Activities
Cash sales 88500
GST collected 9050
Cash purchases of stock (53500)
Advertising (6000)
Cartage inwards (1000)
Wages (30500)
GST paid (9750)
Net Cash Flows from Operating Activities 29800
b)
2015
$ $
Cash sales 88500
GST collected 9050
Interest (1500)
Advertising (6000)
Wages (30500)
GST paid (9750)

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c)
2015
$ $
Cash sales 88500
GST collected 9050
Interest (1500)
Advertising (6000)
Wages (30500)
GST paid (9750)
d)
2015
$ $
Cash sales 88500
GST collected 9050
Interest (1500)
Advertising (6000)
Wages (30500)
Drawings (17000)
GST paid (9750)
21. The Net Cash Flow from Investing Activities for the period is:
a) $6,000
b) ($84,500)
c) ($31,000)
d) ($6,500)

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A small business has provided the following list of cash transactions for the year ended 30 June
2015. At the start of the period the firm’s bank balance was $4,500.
$
Additional capital contributed 12300
Advertising 1800
Cartage outwards 1400
Creditor payments 62600
Debtor collections 53600
GST paid 2200
GST received 6800
Insurance 1400
Interest expense 2000
Interest on government bonds 2900
NAB finance loan 22900
Office salaries 15300
Proceeds from sale of office furniture 3800
Proprietor’s drawings 23100
Purchase of shop fittings 12900
Repayments to NAB 4900
Sales 65500
Shop wages 17900
Stock purchases 8800
a) $15,400
b) $12,500
c) $17,400
d) $14,500
23. The Investing Activities section of the Cash Flow Statement will look like:
a)
Cash Flow Statement (Extract) for the year ended June 30th
2015
$ $

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b)
2015
$ $
c)
2015
$ $
Capital contribution 12300
Net Cash Flows from Investing Activities 3200
d)
2015
$ $
a) $10,100
b) $7,200
c) $5,200
d) $8,100
25. The closing section of the Cash Flow Statement will look like:
a)
2015
$ $

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b)
2015
$ $
c)
2015
$ $
Net increase (decrease) in cash held (32300)
Cash at end of period (27800)
d)
2015
$ $

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