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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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