Question

A mutual fund company receives a dividend of ₹ 20 lakhs on its investments in another company’s shares. Where will it appear in a cash flow statement?

Options

• Cash flow from operating activities

• Cash flow from investing activities

• Cash flow from financing activities

• No cash flow

Answer 1

Cash flow from operating activities

Explanation:
The majority of a mutual fund’s revenue comes from investments; hence, any dividends paid out are considered operational expenses.