CFA Practice Question

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CFA Practice Question

Which of the following should be classified as operating cash flow?

I. Interest paid on borrowed funds
II. Dividends paid to stockholders
III. Interest income
IV. Dividend income
A. I only
C. I and III
Explanation: Interest paid on borrowed funds would be considered operating cash flow because interest is reported on the income statement, while dividends paid to stockholders would be classified as financing cash flow because dividends flow through the retained earnings statement.

Interest and dividend income are considered operating cash flow.

User Contributed Comments 4

User Comment
cswin int and div are other income in Net Income. therefore, in op CF
Vexxum I assume that this is under GAAP?
meeravenk Vexxum ... not USGAAP, IFRS
cebus In this instance, it can work under both. However, if not stated we are to assume it's GAAP
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