AASB 107 Requires That a Note to the Accounts Shall

question 16

Multiple Choice

AASB 107 requires that a note to the accounts shall disclose a reconciliation of cash flows from operating activities to operating profit or loss after income tax as reported in the income statement.The correct adjustments to the operating profit/loss after tax include:

• A) AdD. depreciation expense, gain on sale of plant and equipment, increase in interest payable, increase in inventories.
• B) Subtract: increase in future income tax benefit, increase in accounts receivable, loss on sale of plant and equipment.
• C) AdD. increase in accounts payable, increase in income taxes payable, increase in deferred taxes payable.
• D) Subtract: amortisation expense, increase in future income benefit, increase in interest payable.
• E) None of the given answers.

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Definitions:

Deferred Annuity

An insurance contract that delays payments of income, installments or a lump sum until the investor elects to receive them.

Permanent Pension

A pension that is paid throughout the lifetime of the beneficiary, often until death.

Compounded Monthly

Interest calculation method where interest is added to the principal on a monthly basis, leading to interest on interest in subsequent months.

Monthly Investments

Regular investments made on a monthly basis, often part of a savings or investment strategy.