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:

Formula

A mathematical rule or principle expressed in symbols and numbers used to calculate or solve problems.

Collect Like Terms

The process of simplifying an algebraic expression by combining terms that have the same variable raised to the same power.

Operation Indicated

The process of performing the mathematical operation suggested by a given situation or problem.

Final Value

The last or concluding worth of an investment or financial product, often after a set period or upon maturity.