Acca financial Accounting (FA) Study Text ac ca (FA)

Test your understanding 10 

 

The correct answer is C 

Dividends received involve a cash receipt. The other transactions do not 

involve a movement of cash. 

 

 

Test your understanding 11 

 

The correct answer is D 

 $ 

Profit before tax 

434,850 

Depreciation and loss on disposal charged in P&L 

37,400 

Decrease in inventory 

22,000 

Decrease in trade receivables 

1,000 

Increase in prepayments 

(11,000) 

Decrease in trade payables 

(16,000) 

Finance costs charged in P&L 

35,000 

 ––––––– 

Cash generated from operations 

503,250 

Note that the finance costs charged in the statement of profit or loss are 

included in the reconciliation to identify cash generated from operations. 

However, the cash paid in the year relating to finance costs is only 

relevant when calculating the net cash flow from operations.  

 

 

 

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