Question : Buyback of own shares is shown as an outflow in Financing Activity as _________.
Option 1: Extraordinary items
Option 2: Cash and cash equivalents
Option 3: Both 1 and 2
Option 4: None of the above
Answer (1)
20th Jan, 2024
Correct Answer: Cash and cash equivalents
Solution : Answer = Cash and cash equivalents
Buyback of own shares is shown as an outflow in financing activities because it involves the use of cash or cash equivalents to repurchase shares from shareholders. This transaction represents a capital restructuring activity and is categorized under financing activities in the cash flow statement, impacting the company's capital structure.
Hence, the correct option is 2.
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