Accountancy Part BCash Flow Statement

Dividend received for a trading (non financing) organization is......…

Dividend received for a trading (non financing) organization is.............

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Investing activity

For a trading or manufacturing (non-financial) enterprise, dividend received is a return on its investments in other companies, so it is shown under investing activities. Only for a financial enterprise, whose main business is investing, would it be an operating item.

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.”