Question : While preparing Cash Flow Statement what type of activity is, 'Payment of Cash to acquire Debentures by an Investment company'?
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
The payment of cash to acquire debentures by an investment company is classified as investing activities while preparing the Cash Flow Statement. This is because it involves investments in financial instruments, which fall under investing activities. Hence, the correct option is 1.
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 2: Investing Activities
Option 3: Financing Activities
Question : While preparing a Cash Flow Statement, 'Payment of bonus to the employees' by an insurance company is which type of activity?
Option 4: Cash and cash equivalent
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile