GENERAL KNOWLEDGE

Detailed explanation-1: -The cash flows associated with extraordinary items should be classified as arising from operating, investing or financing activities as appropriate and separately disclosed.

Detailed explanation-2: -Extraordinary items are not the regular phenomenon, e.g., loss due to theft or earthquake or flood. Extraordinary items are non-recurring in nature and hence cash flows associated with extraordinary items should be classified and disclosed separately as arising from operating, investing or financing activities.

Detailed explanation-3: -Answer: Cash flows are classified as operating, investing, or financing activities on the statement of cash flows, depending on the nature of the transaction. Each of these three classifications is defined as follows.

Detailed explanation-4: -In the case of other entities, cash flows arising from interest paid should be classified as cash flows from financing activities while interest and dividends received should be classified as cash flows from investing activities. Dividends paid should be classified as cash flows from financing activities.

Detailed explanation-5: -What Activities Are Included in Cash Flow From Investing Activities? The activities included in cash flow from investing actives are capital expenditures, lending money, and the sale of investment securities.