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    Question

    Which of the following is considered a financing

    activity in Cash Flow Statement (Ind AS 7)?
    A Payment of wages Correct Answer Incorrect Answer
    B Purchase of inventory Correct Answer Incorrect Answer
    C Dividend payment Correct Answer Incorrect Answer
    D Sale of machinery Correct Answer Incorrect Answer
    E Interest received Correct Answer Incorrect Answer

    Solution

    Cash flows are grouped into: тАв Operating: Main revenue activities (sales, wages). тАв Investing: Buying/selling assets (machinery). тАв Financing: Raising/returning capital (equity, debt, dividends). ┬аDividend payment is a financing outflow, as it represents a return to shareholders. It reduces equity capital and is distinct from operating expenses.

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