ACCA Applied Knowledge · Financial Accounting · Cash
Which one of the following is classified as a cash outflow from investing activities in a statement of cash flows under IAS 7?
Purchase of plant for cash is an investing outflow because investing activities cover the acquisition and disposal of non-current assets. Loan repayments and dividends paid are financing flows, and tax paid is classified within operating activities.
- APurchase of plant for cashCorrect
- BRepayment of a bank loan
- CPayment of a dividend to shareholders
- DPayment of tax on profits
Explanation
Investing activities cover acquisition and disposal of non-current assets and other investments. Loan repayment is financing, dividends paid are normally financing in ACCA FA, and tax paid is operating.
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