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Which of the following activities will be classified as cash flow from operations?

Answer: C) Interest expense

  1. A) Purchase of Plant
  2. B) Redemption of Bond
  3. C) Interest expense
  4. D) Dividend payment

Explanation

Interest expense. It arises from running the business and goes through profit, so most standards and textbooks place interest paid in operating activities (IFRS also allows financing). Buying a plant is an investing outflow. Redeeming bonds and paying dividends are financing outflows, as they deal with lenders and owners.

Asked in: TGTDCL 2021

Topic: Thermodynamics, Pumps and Compressors