Accountancy Part BCash Flow Statement

According to AS-3, cash proceeds from issue of share is:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → financing activity

Issuing shares brings in long-term capital from the owners. Under AS-3, cash proceeds from issuing shares (equity or preference) are a financing inflow.

NCERT (2026-27 edition):
Cash from Financing Activities – “As the name suggests, financing activities relate to long-term funds or capital of an enterprise, e.g., cash proceeds from issue of equity shares, debentures, raising long-term bank loans, repayment of bank loan, etc.”