Which of the following items would be classified under 'Investing Activities' in a statement of cash flows?

Answer options:

Cash proceeds from issuing new ordinary shares.

Cash paid for income taxes.

Cash proceeds from the sale of a factory building.

Cash paid for interest on a bank loan.

How to approach this question

Identify which transaction relates to the acquisition or disposal of long-term assets and other investments.

Full Answer

C.Cash proceeds from the sale of a factory building.✓ Correct

According to IAS 7 Statement of Cash Flows, investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. The sale of a factory building (a non-current asset) generates cash flows from investing activities.

Common mistakes

Confusing investing activities with financing activities (like issuing shares or paying dividends).

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Practice the full ACCA FA — Financial Accounting Practice Exam 3

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