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26 October, 22:00

Which of the following is classified as a cash flow from operating activities in a statement of cash flows?

(A) payment of devidends.

(B) Receipt of devidends.

(C) Receipt of cash for loan collection

(D) Payment of cash for loan repayment

(E) none of the above

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Answers (1)
  1. 26 October, 22:35
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    (B) Receipt of dividends.

    Explanation:

    Cash flow from operating activities include, cash flow generated from normal transactions of business, that is day to day transactions, if a company invests in some subsidiary then it will earn dividends or interest in case any investment is in the form of providing loans to any concern, where by interest is received.

    Therefore, operating income includes, any interest received or dividend received.

    Any kind of loan taken is financing activity, and any kind of loan given is investing activity.

    Further, dividend given is financing activity.

    Thus, correct answer is

    (B) Receipt of dividends.
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