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      Question

      Tara Sports Limited, an entity engaged in the

      manufacturing and trading of sports equi pment, received dividends from its investment in shares . While preparing cash flow statement, this dividend should be disclose 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 Operating cash outflow Correct Answer Incorrect Answer
      E Financing cash outflow Correct Answer Incorrect Answer

      Solution

      Explanation :   
      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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