CFA Practice Question

There are 90 practice questions for this study session.

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 paid, and 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 flows while interest and dividends received must be classified as operating cash flows.
Explanation: IAS 7 allows a choice of operating or investing cash flows for the placement of interest and dividends received. Interest and dividends paid may also be classified as either operating or financing cash flows.

User Contributed Comments 1

User Comment
CJPerugini "Interest and dividends received and paid may be classified as operating, investing, or financing cash flows provided that they are classified consistently from period to period." - IAS 7.31
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