Accountancy Part BCash Flow Statement

Cash Inflows from Financing Activities does not include-

Cash Inflows from Financing Activities does not include-

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Dividends and interest received

Cash inflows from financing activities are the cash a business raises as capital or as long-term borrowing: issue of shares, issue of debentures, raising of loans. For a non-financial enterprise, interest and dividends received are investing inflows, the return on its investments, so they are not financing inflows.

Option (1) Debentures issued at Discount — A financing inflow. The cash actually received on the debentures (face value less discount) is borrowed money raised.

Option (2) Mortgage loan raised — A financing inflow. A loan raised against property is a long-term borrowing.

Option (4) Equity shares issued at Premium — A financing inflow. The whole amount received, premium included, is owners’ capital raised.

NCERT (2026-27 edition):
Cash from Financing Activities – “As the name suggests, 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.”

NCERT (2026-27 edition):
Treatment of Some Peculiar Items – “… 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.”