Separate disclosure of cash flow arising from Financial Activities is important because
This question was previously asked in
Shift 29/05/2023 3:30 PM - 6:30 PM
A
It helps in identifying the investment activities.
B
It helps in gaining in investing activities.
C
It helps in making investing decision.
D
It is useful in predicting claims on future cash flow by providers of funds to the enterprise.
Correct Answer
It is useful in predicting claims on future cash flow by providers of funds to the enterprise.
Detailed Explanation
Separate disclosure of cash flow arising from financial activities is important because it provides information about how the company is obtaining or repaying funds, such as loans and equity investments. This information is valuable for assessing the company's ability to meet its financial obligations and to understand the impact of these activities on future cash flows and the claims on cash flows by the providers of funds to the enterprise.
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