Question

Which of the following transactions are shown under financing activities while preparing a cash flow statement?

1. Issue of equity shares
2. Cash received from debtors
3. Redemption of debentures
4. Interest received

Options

• (i)

• (i), (iii) and (iv)

• (i) and (iii)

• (i), (ii) and (iv)

Answer 1

(i) and (iii)

Explanation:

Financing activities affect a company’s capital structure. Issuing equity shares and redeeming debentures both alter financing sources. Cash received from debtors and interest income are operating and investment activities, respectively; hence, they are not part of financing.