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      Question

      While preparing cash flow statement, an entity (other

      than a financial institution) should disclose the dividends received from its investment in shares as:
      A Operating cash inflow Correct Answer Incorrect Answer
      B Investing cash inflow Correct Answer Incorrect Answer
      C Financing cash inflow Correct Answer Incorrect Answer
      D Cash & cash equivalent Correct Answer Incorrect Answer

      Solution

      As per AS-3 and Ind AS 7, for entities other than financial institutions, dividends received are classified as cash inflows from investing activities, because they represent returns on investments in other entities.

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