Question

Name the activities which is related to long-term funds or capital of an enterprise?

Options

• Operating activities

• Investing activities

• Financing activities

• None of these

Answer 1

Financing activities

Explanation:

Financing activities concern an enterprise's long-term money or capital, such as cash receipts from the sale of equity shares, debentures, long-term bank loans, bank loan redemption, and so on. Financing activities, according to AS-3, are those that result in changes in the amount and composition of the owners' capital (including preference share capital in the case of a corporation) and the enterprise's borrowings. Separate disclosure of cash flows deriving from financing activities is crucial since it aids in projecting future cash flow claims by fund providers (both capital and borrowings).