Accounting Online Program Certification Practice Test

What was the cash paid for additions to non-current assets during the year for Galaxy Ltd?

1. £5,000

2. £7,500

3. £10,000

4. £12,500

The correct answer is: £7,500

To find the cash paid for additions to non-current assets during the year for Galaxy Ltd, it is essential to analyze the company’s cash flow statement, specifically focusing on the investing activities section. This section outlines all transactions concerning the purchase and sale of non-current assets. The cash paid for additions to non-current assets typically includes payments made to acquire fixed assets, such as property, plant, equipment, or intangible assets, during the reporting period. This figure is usually derived from both the cash flow statement and any accompanying notes that clarify the details of those transactions. If the chosen answer is £7,500, it likely reflects accurate data collected from the company's financial records, indicating that this amount corresponds to the total cash outflow for the acquisitions during that year. It is essential to ensure that this figure aligns with both the cash flows recorded and any further disclosures in financial statements that confirm the capital expenditure on non-current assets. The other options could represent potential amounts that might relate to other activities or incorrect interpretations of cash flows but are not the actual cash paid for additions during this specific year. Thus, a careful review of the cash flow and related statements is paramount in identifying the correct cash outflow amount for non-current asset additions.