Question

Question 13. Which one of the following statements is correct according to IAS 7 Statement of Cash Flows?

Preparing a statement of cash flows using the direct method gives a different cash flow from operating activities to that using the indirect method

Cash flows from interest and dividends should be disclosed separately

A statement of cash flows may be included as a primary statement in an entitys financial statements, or in the notes to the financial statements

Financing activities include the acquisition and disposal of long-term assets and other investments not

Answer 1

Answer:

Option B: Cash flows from interest and dividends should be disclosed separately

Explanation:

In Cash Flow Statement,

The answer from direct method and indirect method will always be same.

The cash flows from interest and dividends are shown in investing activity but they are shown separately.

The cash flow statement is always shown as a separate financial statement and not in notes to accounts.

Financing activity does not include purchase of long term assets. These are included in investing activities.

Hence,

Option 'B' is correct, and rest all are incorrect.

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