Which combination of the following activities are financing activities-
(A) Proceeds from issue of equity share capital.
(B) Purchase of goodwill.
(C) Proceeds from long-term borrowings.
(D) Interim dividend paid on equity shares.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (C) and (D) only
(A) Proceeds from issue of equity share capital → Financing Activity. It relates to raising funds from owners (shareholders).
(B) Purchase of goodwill → Investing Activity. It involves acquisition of an intangible asset, not related to financing.
(C) Proceeds from long-term borrowings → Financing Activity. It represents funds raised from lenders, affecting the capital structure.
(D) Interim dividend paid on equity shares → Financing Activity. It involves payment to owners, hence treated as a financing outflow.