BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is component in cash receipt.
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purchasing materials
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Wages
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dividend received
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acquire fixed asset
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Explanation:
Detailed explanation-1: -(c) dividends received would be considered an investing activity.
Detailed explanation-2: -However, it is more appropriate that interest paid and interest and dividends received are classified as financing cash flows and investing cash flows respectively, because they are cost of obtaining financial resources or returns on investments.
Detailed explanation-3: -So, are dividends in the cash flow statement? Yes, they are. It’s listed in the “cash flow from financing activities” section.
Detailed explanation-4: -6. Paragraph 33 of IAS 7 states that interest paid and interest and dividends received are normally classified as operating cash flows by a financial institution.
There is 1 question to complete.