Here are the best answers to complete each of the sentences:

### VII
1. I was cycling home last Friday when I **saw** an old lady on the pavement.
**Answer: A. saw**

2. Yesterday afternoon, when I **was walking** home from school, I bumped into an old friend.
**Answer: C. have walked** (should be "was walking")

3. Last week, I **was waiting** at the bus stop when I saw the smoke coming out from the nearby building.
**Answer: C. was waiting**

4. It **was raining** for days, so the road to the village was very slippery.
**Answer: B. was rained** (should be "was raining")

5. I **heard** a scream from the apartment above while I was cooking my dinner yesterday.
**Answer: A. heard**

### VIII
1. I **saw** him in his car, but he is watching the traffic and didn’t see me.
**Incorrect: D (should be 'was watching')**

2. While my parents were walking near the lake, they **saw** a wallet lying on the grass.
**Incorrect: C (should be 'saw')**

3. When we **found** her, she was hiding in the wardrobe and crying.
**Incorrect: A (should be 'find')**

4. While I was **withdrawing** some money from a cash machine, a man **snatched** it all out of my hand and **ran** away.
**Incorrect: C (should be 'snatched' and 'ran')**

5. At about 9 p.m. last night, we were **watching** TV when someone **knocked** at the door.
**Incorrect: D (should be 'knocked')**

Feel free to reach out if you need further explanations or assistance!