Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Which of the following is an example of cash flow from financing activity?

Options:

Receipt of dividend on investment

Cash received from a customer

Payment of dividend

Purchase of a fixed asset

Correct Answer:

Payment of dividend

Explanation:

Cash Inflows from financing activities-
Cash proceeds from issuing shares (equity or/and preference).
Cash proceeds from issuing debentures, loans, bonds and other short/ long-term borrowings.
Cash repayments of amounts borrowed.
Interest paid on debentures and long-term loans and advances.
Dividends paid on equity and preference capital.