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Supplementary objective test questions

18.2 Which of the following items could appear as items in an entity’s
statement of cash flows?

(1) A bonus issue of shares

(2) A rights issue of shares

(3) The revaluation of non-current assets

(4) Dividends paid

A All four items

B (1), (3) and (4) only

C (2) and (4) only

D (3) only

CHAPTER 19 – THE INTERPRETATION OF FINANCIAL
STATEMENTS

19.1 EFG have sales for the year of $40,000 and cost of sales of $30,800.

What is the gross profit margin?

A 77%

B 129%

C 43%

D 23%

19.2 DEF’s gearing ratio would fall if:

A there was a decrease in long-term loans which was less than a decrease
in shareholder’s funds

B there was a decrease in long-term loans which was greater than the
decrease in shareholder’s funds

C interest rates rose

D interest rates fell

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