declaration of interim dividend is inflow,outflow or no flow of cash?

Open in App

Solution

Interim dividend is the dividend that is declared by the Board of Directors in between the financial year if authorised by Articles of Association. It becomes due and paid during the same year. In cash flow it would be added back to the current years profit to find out cash from operating activities and secondly it is shown as cash used in financing activities. Thus ultimately it will lead to cash outflow from business.

Suggest Corrections

Similar questions

State which fo the following would result in inflow/outflow of Cash or Cash Equivalents:
(i) Issue of fully paid bonus shares.
(ii) Writing off bad debts against the provision for Doubtful Debts.
(iii) Declaration of Final dividend.
(iv) Declaration of interim dividend.
(v) Cash Deposited into Bank.
(vi) Cash withdrawn from Bank.
(vii) Purchase fo Marketable Securities for Cash.

Q. State which of the following would result in inflow/outflow or no flow of Cash and Cash Equivalents:
(a) Sale of Fixed Assets, Book Value ₹ 1,00,000 at a profit of ₹10,000.
(b) Sale of goods against cash.
(c) Purchase of machinery for cash.
(d) Purchase of Land and Building for ₹10,00,000. Consideration paid by issue of debentures.
(e) Issued fully paid Bonus Shares.
(f) Cash withdrawn from bank.
(g) Payment of Interim Dividend.
(h) Proposed Dividend.

Q. State whether the following would result in inflow, outflow, or no flow of cash:
(i) Bill Receivable endorsed to Creditors
(ii) Old vehicle written off

Q. What are the different cash inflows and cash outflows of investing activities?

Q. Which of the following statement is true?
a. Cash flow reveals only the inflow of cash.
b. Cash flow reveals only the outflow of cash.
c. Cash flow is a substitute for income statement.
d. Cash flow statement is not a replacement of funds flow statement.

Join BYJU'S Learning Program