ACCA Applied Knowledge · Financial Accounting · Cash
Which item would appear as a cash flow from financing activities in a statement of cash flows prepared under IAS 7?
Proceeds from issuing new ordinary shares are a financing cash flow because they raise capital from owners. Sale of plant is investing, and payments to suppliers are operating cash flows.
- AProceeds from the sale of plant
- BProceeds from issuing new ordinary sharesCorrect
- CCash paid to suppliers of inventory
- DInterest received on investments, where the entity classifies it as investing
Explanation
Issuing shares changes equity and is financing. Plant sale proceeds are investing, supplier payments are operating, and interest received classified as investing is investing.
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