Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:
Which item comes under financial activities in Cash Flow Statement?
Options:
Redemption of Preference Share
Issue of Preference Share
Interest paid on debentures and long-term loans and advances
All of the above
Correct Answer:
All of the above
Explanation:
Cash Inflows from financing activities :
a. Cash proceeds from issuing shares (equity or/and preference).
b. Cash proceeds from issuing debentures, loans, bonds and other short/ long-term borrowings.
Cash Outflows from financing activities include:
a. Cash repayments of amounts borrowed, redemption of preference shares, debentures, buy back of shares etc.
b. Interest paid on debentures and long-term loans and advances.
c. Dividends paid on equity and preference capital.