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According to the Financial Accounting Standards Board (FASB), which of the following is a cash flow from a "financing" activity?

cash outflow to the government for taxes. cash outflow to shareholders as dividends. cash outflow to lenders as interest. cash outflow to purchase bonds issued by another company.

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Question added by خالد ابراهيم , Senior Accountant , Al Khayyat Group /Peugeot and Mazda Automative agent in Jordan
Date Posted: 2013/12/04
Muhammad Faheem
by Muhammad Faheem , Consultant- Accounts, Audit & Taxation , Basim Associates

As per IAS7, Interest and dividend received and paid may be classified as operating, investing, or financing cash flows, provided that they are classified consistently from period to period.

Cash flow arising from taxes on income are normally classified as operating, unless they can be specifically identified with financing or investing activities.

Cash outflow to shareholders as dividend and cash outflow to lenders as interest are the correct answer in the light of the above explaination as per IAS-7.

Mohammad Ibrahim, CMA, CertIFR
by Mohammad Ibrahim, CMA, CertIFR , Accounting Operation Team Leader , KFH ( Kuwait Finance House )

cash outflow to the government for taxes. ( Is Operating Activity )cash outflow to shareholders as dividends. ( Is Financing Activity ) cash outflow to lenders as interest. ( Is Operating Activity )cash outflow to purchase bonds issued by another company. ( Is Investing Activity )

Khurrum Iqbal
by Khurrum Iqbal , Accountant , Akun Logistic Services

 

Operating Activity: Cash outflow to the government for taxes.

Financing Activity: Cash outflow to shareholders as dividends.

Financing Activity: Cash outflow to lenders as interest.

Investing Activity: Cash outflow to purchase bonds issued by another co.

 

Note:

The above may be classified differently if the company itself is a Finance or a Banking company or Non Banking Financial Institution, and if there is a change from outflows to inflows. 

 

cash outflow to lenders as interest. >> 

علاءالدين احمد محمد إبراهيم
by علاءالدين احمد محمد إبراهيم , المحلل المالى ومسئول الميزانية , شركة خطوط اللياقة للأجهزة الرياضة المحدودة

cash outflow to shareholders as dividends.

cash outflow to lenders as interest.

 

Sulayman Abbas Ladan
by Sulayman Abbas Ladan , Deputy Bursar , Ahmadu Bello University

Cash outflow to purchase Bonds issued by another company

Deleted user
by Deleted user

ANSWER    cash outflow to lenders as interest

Sahar Alech
by Sahar Alech , Auditor / Financial Manager , Accounting Services Office

Cash out flow to shareholders is a financing activity

Abdul Wahab
by Abdul Wahab , Credit Controller , Takween Advanced Industries

cash outflow to shareholders as dividends.

Deleted user
by Deleted user

cash outflow to dividends & interest to lenders

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