Accountancy Part BCash Flow Statement

Cash flow from Financing Activities does not include which of the fol…

Cash flow from Financing Activities does not include which of the following?

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Dividend received from Equity Shares

For a non-financial company, payments to providers of capital and borrowings are financing flows, while dividend and interest received on investments are investing inflows.

Option (1) Dividend paid to Preference Shareholders — A financing outflow.

Option (3) Proceeds from issue of Debentures — A financing inflow.

Option (4) Payment for Interest on Debentures — A financing outflow.

NCERT (2026-27 edition):
Cash from Financing Activities

Extract from the NCERT textbook

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.”