Which combination of the following activities are financing activities-

(A) Proceeds from issue of equity share capital.

(B) Purchase of goodwill.

(C) Proceeds from long-term borrowings.

(D) Interim dividend paid on equity shares.

Choose the correct answer from the options given below:

Cash Flow Statement classifies activities into three categories: Operating, Investing, and Financing Activities.

Financing Activities relate to changes in the size and composition of owner's capital and borrowings of the enterprise. These activities result in changes in equity and debt capital.

Let's examine each activity:

(A) Proceeds from issue of equity share capital → This is a financing activity. When a company issues equity shares, it raises capital from shareholders, resulting in a cash inflow.

(B) Purchase of goodwill → This is an investing activity, not a financing activity. Goodwill is an intangible asset, and its purchase involves acquisition of long-term assets. Investing activities relate to acquisition and disposal of long-term assets.

(C) Proceeds from long-term borrowings → This is a financing activity. When a company borrows funds through loans or debentures, it raises capital through debt, resulting in a cash inflow.

(D) Interim dividend paid on equity shares → This is a financing activity. Payment of dividends (interim or final) represents distribution of profits to shareholders and is a cash outflow to providers of equity capital.

Therefore, activities (A), (C), and (D) are financing activities, while (B) is an investing activity.

Correct Answer: Option 4 - (A), (C) and (D) only