CFA Practice Question

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CFA Practice Question

Which statement is CORRECT regarding presentation choices permitted in IAS 7?
A. Interest and dividends received may be classified as either operating or investing cash flows.
B. Interest paidand interest and dividends received must be classified as operating cash flows. Dividends paid must be classified as financing cash flows, as they are a cost of obtaining financial resources.
C. Interest and dividends paid must be classified as financing cash while interest and dividends received must be classified as operating cash flows.
Explanation: IAS 7 allows a choice of operating or investing for the placement of interest and dividends received. Interest and dividends paid may be classified as either operating or financing cash flows.

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