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Hi,
Top trades & Co question, trading for a number of years, currently expanding?
an extract from s of c flows.
net cash from op activities £995
net cash used in investing activities (540)
net cash flows in financing activities (200)net increase in cash and cash equ 255
cash and cash equ at the beg of the period 200
cash and cash equ at the end of the period 455
which of the following is correct according to the statement of cash flows
a good w capital
b net cash generated from finance ops
c net cash generated from operating activities used to fund the additions to non current assets
d existing non c a have been sold to cover the additions to non c assets,
ans is c?
I will be honest ….. I can’t even pretend to understand how to answer this question?question 13…. neg good will i thought this was credited directly to ret earning A
But it was incorrect the answer was b credited to P& L
c was debited to P & L
d deducted from positive g.w I knew this was not the correct answer but got tripped up and chose A why is it B Please?Are you certain that you have typed it correctly? I’m 100% certain that you haven’t!
When you look again at the question, look closely at options b and c
They cannot both be correct – financing activities is negative and operating is positive … so one of them MUST be incorrect
Now you work it out from there!
Question 13 – why is b correct? Because it’s credited direct to profit or loss! That’s the rule … that’s why it’s correct
OK?
- The topic ‘september 2016 qu 11 top trades and 13 neg goodwill’ is closed to new replies.