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
Financing activities are those that change the size or make-up of the owners’ capital and the borrowings of the enterprise. Raising funds from owners or lenders, repaying them and paying them a return all belong here.
(A) Proceeds from issue of equity share capital — Financing. Money raised from the owners.
(B) Purchase of goodwill — Investing, not financing. Goodwill is an intangible fixed asset, and paying to acquire a fixed asset is an investing outflow.
(C) Proceeds from long-term borrowings — Financing. Money raised from lenders.
(D) Interim dividend paid on equity shares — Financing. Dividend is the return paid to the owners on their capital, whether it is interim or final.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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