Question
Download Solution PDFWhich one of the following is not an example of ‘financing activities’ with reference to cash flow statement ?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFCash from Financing Activities:
- As the name suggests, financing activities relate to long-term funds or capital of an enterprise, e.g., cash proceeds from the issue of equity shares, debentures, raising long-term bank loans, repayment of bank loans, etc.
- As per AS-3, financing activities are activities that result in changes in the size and composition of the owners’ capital (including preference share capital in case of a company) and borrowings of the enterprise.
- Separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of funds (both capital and borrowings) to the enterprise.
Examples of financing activities are:
- Cash Inflows from financing activities: Cash proceeds from issuing shares (equity or/and preference); Cash proceeds from issuing debentures, loans, bonds, and other short/ long-term borrowings.
- Cash Outflows from financing activities: Cash repayments of amounts borrowed, Interest paid on debentures and long-term loans and advances, Dividends paid on equity and preference capital.
The sale of fixed assets is an example of Cash Inflow From Investing Activities.
Last updated on Jun 6, 2025
-> The UGC NET Exam Schedule 2025 for June has been released on its official website.
-> The UGC NET Application Correction Window 2025 is available from 14th May to 15th May 2025.
-> The UGC NET 2025 online application form submission closed on 12th May 2025.
-> The June 2025 Exam will be conducted from 21st June to 30th June 2025
-> The UGC-NET exam takes place for 85 subjects, to determine the eligibility for 'Junior Research Fellowship’ and ‘Assistant Professor’ posts, as well as for PhD. admissions.
-> The exam is conducted bi-annually - in June and December cycles.
-> The exam comprises two papers - Paper I and Paper II. Paper I consists of 50 questions and Paper II consists of 100 questions.
-> The candidates who are preparing for the exam can check the UGC NET Previous Year Papers and UGC NET Test Series to boost their preparations.