Question

Financing cash flows include cash transactions with lenders, such as borrowing money and repaying debt, and with stockholders, such as issuing stock and paying dividends.
True or False?

Answer 1

Answer:

True

Explanation:

The International Accounting Standards (IAS) 7  defined cash flow as  ‘inflows and outflows of cash and cash equivalents’.

Financing cash flow or cash flow from financing activities are cash inflows or outflows that impact on the equity or debt of the entity. The component of cash flow from financing activities are cash flow from transactions on common stock, cash flow from transactions on debt instruments and other financing instruments. Also included is payment of dividends.