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    Question

    Cash flow from financing activities is a section of a company's cash flow statement , which shows the net flows of cash that are used to fund the company. Which among the following will not lead to generation of cash flows in financing activities?

    A Issuing Zero Coupon Bonds Correct Answer Incorrect Answer
    B Taking a long-term bank loan Correct Answer Incorrect Answer
    C Issuing right shares Correct Answer Incorrect Answer
    D Issuing Bonus Shares Correct Answer Incorrect Answer
    E All will lead to cash generation Correct Answer Incorrect Answer

    Solution

    In case of bonus issue, there are no cash inflows as it is capitalisation of profits. The profits are transferred from reserves or surplus to the Capital A/c.

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