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Question : While preparing Cash Flow Statement, purchase of goodwill is treated as :

 

Option 1: Operating activity

Option 2:  Financing activity

 

Option 3: Investing activity

 

Option 4: Extraordinary item


Team Careers360 4th Jan, 2024
Answer (1)
Team Careers360 8th Jan, 2024

Correct Answer: Investing activity

 


Solution : Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Purchase of intangible assets is an investing activity (outflow of cash).

 

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