S1: In a cash flow statement under Ind AS 7, dividends paid can be classified as either operating or financing activities. S2: Interest paid can be classified as either operating or financing activities. Which statement(s) is/are correct?
Explanation:
Ind AS 7 allows flexibility. Dividends paid can be classified as financing (cash outflow for financing) or operating (to assist in determining cash from operations). Interest paid can be operating or financing. Both are correct.
Explanation:
Depreciation is charged to the Profit and Loss Account but does not involve any cash outflow, making it a non-cash expense. It is also credited to the Provision for Depreciation or Asset account, reducing its book value. Both are correct.
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