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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 1: Operating Activities

Option 2: Investing Activities

Option 3: Financing Activities

Option 4: None of the above


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 26th Jan, 2024

Correct Answer: Operating Activities


Solution : Answer = Operating Activities

The payment of cash to acquire shares of another company by a trading company would be classified as investing activities in the Cash Flow Statement. This is because it involves the acquisition of assets for investment purposes, which falls under investing activities.
Hence, the correct option is 1.

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