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Question
A ten-year bond was issued at par for Rs.25,000 cash. This transaction should be shown in a statement of cash flows under ______________.
A ten-year bond was issued at par for Rs.25,000 cash. This transaction should be shown in a statement of cash flows under ______________.
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Solution
The correct option is B Financing activities
As per AS-3, financing activities are activities that result in changes in the size and composition of the owner's capital and borrowings of the enterprise. Separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of funds to the enterprise.
As per AS-3, financing activities are activities that result in changes in the size and composition of the owner's capital and borrowings of the enterprise. Separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of funds to the enterprise.
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