- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 20. Understanding Cash Flow Statements
- Subject 1. Classification of Cash Flows and Non-Cash Activities
CFA Practice Question
Decision-makers often compare net income to net cash flows from operating activities. Which of the following accounts would not be included in both of these amounts? Assume GAAP.
B. Interest revenue that has been received
C. Dividends declared and paid
D. Dividend revenue that has been received
A. Interest expense that has been paid
B. Interest revenue that has been received
C. Dividends declared and paid
D. Dividend revenue that has been received
Correct Answer: C
Dividends declared and paid are financing activities that do not affect net income or net cash flows from operating activities. However, IFRS allows dividends paid to be categorized as either CFO or CFF.
User Contributed Comments 3
| User | Comment |
|---|---|
| danlan | C does not appear in either of them A appear for both of them B, D appear for net income and financing activity? Is this correct? |
| antarctica | A, B and D appear in both of them |
| bokica | if inderect method is used, intreset expence must be disclosed? |