Pick the odd one out while Calculating Cash Flow from Financing Activities:

Rent received

The correct answer is option 4- Rent received.

Rent received is an investing activity, not a financing activity. All others are financing activities while preparing the cash flow statement.

Financing activities relate to long-term funds or capital of an enterprise, e.g., cash proceeds from issue of equity shares, debentures, raising long-term bank loans, repayment of bank loan, etc. As per AS-3, financing activities are activities that result in changes in the size and composition of the owners’ capital (including preference share capital in case of a company) and borrowings of the enterprise. Separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of funds (both capital and borrowings) to the enterprise.