Question : 'Loans and advances granted' by a company will be considered, as which type of activity while preparing a Cash Flow Statement.
Option 1: Operating Activities
Option 2: Investing Activities
Option 3: Financing activities
Option 4: None of the above
Correct Answer: Investing Activities
Solution : Answer = Investing Activities
'Loans and advances granted' by a company will be considered as investing activities while preparing the Cash Flow Statement. This is because it involves the deployment of funds in assets to generate returns in the future. Hence, the correct option is 2.
Question : While preparing a Cash Flow Statement, what type of activity is 'Payment of Cash to acquire shares of another company by a trading company'?
Option 3: Financing Activities
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
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