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Question
How will you deal increase in the balance of ‘securities premium’ while preparing a cash flow statement?
Options
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash equivalent
MCQ
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Solution
Cash flow from financing activities
Explanation:
A securities premium occurs when a company issues shares at a price above their face value. Since issuing shares falls under financing activities, the cash flow statement records the increase as a cash inflow under that category.
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