Question -
Answer -
In a firm, the financing activities are associated with capital or long term funds of the firm, the financing activities bring about change in capital and borrowed funds.
The following cash inflows and outflows as per AS3 can be mentioned here as:
1. Cash received from the issuing of shares and similar instruments causes cash inflow
2. Cash received from issuing of debentures, obtaining loans, bonds and similar instruments brings cash inflow.
3. Repayments of debentures, loans and bonds in form of cash is considered cash outflow
4. Buying back shares and debentures which were issued is also cash outflow
5. Interest payment for debentures, advances and loans.
6. Dividend payment to equity and preference shareholders.