KASNEB CPA Foundation Level (Kenya) · Financial Accounting

Cash flow and error correction

10 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 10 questions

  1. A company made a profit of KSh 500,000 after charging depreciation of KSh 120,000. During the year inventory rose by KSh 40,000, receivables rose by KSh 30,000 and payables rose by KSh 20,000. What is…
  2. A company made a profit of KSh 300,000 after charging depreciation of KSh 80,000. During the year inventory rose by KSh 25,000, receivables rose by KSh 15,000 and payables rose by KSh 10,000. What is…
  3. A company made a profit of KSh 900,000 after charging depreciation of KSh 200,000. During the year inventory rose by KSh 60,000, receivables rose by KSh 50,000 and payables rose by KSh 30,000. What is…
  4. A company made a profit of KSh 240,000 after charging depreciation of KSh 60,000. During the year inventory rose by KSh 20,000, receivables rose by KSh 10,000 and payables rose by KSh 5,000. What is t…
  5. In a cash flow statement, the purchase of new machinery is classified under
  6. In a cash flow statement, the issue of new shares for cash is classified under
  7. Which of the following is added back to profit when calculating cash from operations using the indirect method?
  8. Profit for the year is first calculated as KSh 400,000. It is then found that rent paid of KSh 30,000 for next year was charged as an expense. What is the correct profit?
  9. Profit is first calculated as KSh 250,000. It is then found that a purchase of a machine for KSh 60,000 was charged as an expense. The machine is to be depreciated by KSh 6,000 for the year. What is t…
  10. A business owner takes goods costing KSh 12,000 from stock for personal use without recording it. How should this be treated?

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