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ACCA Applied Knowledge · Financial Accounting · Statement of cash flows (excluding partnerships)

Under IAS 7, which of the following items would be classified within cash flows from investing activities in a company's statement of cash flows?

Cash paid to acquire plant and equipment is an investing activity under IAS 7, because investing cash flows relate to buying and selling non-current assets and investments. Receipts from customers and payments to suppliers are operating, while issuing shares is a financing activity.

  1. ACash received from customers for goods sold
  2. BCash paid to acquire plant and equipmentCorrect
  3. CCash received from issuing new ordinary shares
  4. DCash paid to suppliers of inventory

Explanation

Investing activities cover the purchase and sale of non-current assets and other investments. Cash paid for plant is an investing outflow. Customer receipts and supplier payments are operating, and share issues are financing.

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