Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

A Mutual Fund Company receives a dividend of Rs20 Lakhs on its investments in another company's shares. Where will it appear in a Cash Flow Statement?

Options:

Cash Flow from Operating Activities

Cash Flow from Investing Activities

Cash Flow from Financing Activities

Cash Equivalent

Correct Answer:

Cash Flow from Operating Activities

Explanation:

In case of a financial enterprise (whose main business is lending and borrowing), interest paid, interest received and dividend received are classified as operating activities while dividend paid is a financing activity.