Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:
Dividend paid by a manufacturing company is classified under which kind of activity while preparing cash flow statements?
Options:
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Cash Flow from Operating Activities
No cash flow
Correct Answer:
Cash Flow from Financing Activities
Explanation:
In case of a non-financial enterprise, as per AS-3, it is considered more appropriate that payment of interest and dividends are classified as financing activities whereas receipt of interest and dividends are classified as investing activities.