(a) (i) Statement of cash flows is a statement which provides users of financial statements with the ability of an entity to generate cash and cash equivalents, as well as indicating the cash needs of the entity. In simple terms, it is the statement of how cash and cash equivalents have been generated and used by an organisation.

(ii) Cash comprises cash on hand (physical cash) and demand deposits.

(iii) Cash Equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in values.

(iv) Operating Activities are the principal revenue-producing activities of the enterprise and other activities that are not investing or financing activities.

(v) Investing Activities are the acquisition and disposal of non-current assets and other investments not included in cash equivalents.

(vi) Financing Activities are activities that result in changes in the size and composition of the equity capital and borrowing of the entity.

(b) (i)
Current Ratio = Current Assets / Current Liabilities
= (130,000 + 60,500 + 3,453) / 96,750
= 193,953 / 96,750
= 2:1

Quick Ratio = (Trade Receivable + Cash in hand) / Current Liabilities
= (60,500 + 3,453) / 96,750
= 0.66:1