Which of the following is a financing cash flow?
A) Purchase of common shares of another company
B) Dividend payments
C) Rental payments
D) Interest received

Question

Quizplus · Accepted Answer

Dividend payments are a financing cash flow as they represent a distribution of profits to shareholders, similar to the payment of interest on debt. Choice A (purchase of common shares of another company) is an investing cash flow, as it represents an acquisition of an asset, and Choices C and D (rental payments and interest received) are operating cash flows, as they relate to the day-to-day activities of the business.

Which of the Following Is a Financing Cash Flow