Question : In which category 'Rent received' will be classified while preparing the Cash Flow Statement in the case of a Real Estate Agent?
Option 1: Operating Activities
Option 2: Investing Activities
Option 3: Financing Activities
Option 4: None of the above
Correct Answer: Operating Activities
Solution : Answer = Operating Activities
"Rent received" by a real estate agent would typically be classified as operating activities when preparing the Cash Flow Statement. This income is generated from the primary business operations of the real estate agency, aligning with the definition of operating activities. Operating activities are the principal revenue-producing activities of the enterprise. Hence, the correct option is 1.
Question : In which category 'Rent received' be classified while preparing the Cash Flow Statement in the case of a Non-Real Estate Agent?
Question : While preparing Cash Flow Statement what type of activity is, 'Payment of Cash to acquire Debentures by an Investment company'?
Option 2: Investing activities
Option 3: Financing activities
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile