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Which of the following is not a typical cash flow under financing activities? Group of answer...

Which of the following is not a typical cash flow under financing activities?

Group of answer choices

cash inflow from sale of equity securities

cash inflow from sale of bonds

cash outflow for payment of dividends

cash outflow for loans to other entities

cash outflow for payment of amounts borrowed

Solutions

Expert Solution

Cash Flow from Financing Activities includes activities which fall under financing function of the organization. The following options are explained

Cash inflow from sale of equity securities – As this is cash inflow from equity which is part of Finance so it is cash flow from financing activities

Cash inflow from sale of bonds – As bonds are part of financing activities, it will fall under financing activities

Cash outflow for payment of dividends – Dividends are part of financing activities and so will fall under financing activities

Cash outflow for loans to other entities – Loan to others is a part of Investing activities of the organization and so will not fall under financing activities

Cash outflow for payment of amounts borrowed – Amount borrowed is a part of financing activities and so repayment of amount borrowed will fall under financing activities of the organization

So, as per above discussion, option D is the correct option

jeff jeffy answered 1 year ago
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