Question : Identify the transations as belonging to (i) Operating activity (ii) Investing activity (iii) Financing activity (iv) Cash and cash Equivalent -
(a) Cash received against revenue from service rendered
(b) Proceeds from issue from debenture
(c) Income tax paid on gain on sale of asset
(d) Mareketeble securities
Option 1: (a) Investing activity
(b) Operating activity
(c) Financing activity
(d) Cash and cash equivalent
Option 2: (a) Financing activity
(b) Cash and cash equivalent
(c) Investing activity
(d) Operating activity
Option 3: (a) Operating activity
(b) Financing activity
(c) Investing activity
(d) Cash and cash equivalent
Option 4: (a) Cash and cash equivalent
(b) Financing activity
(c) Operating activity
(d) Investing activity
Correct Answer: (a) Operating activity
(b) Financing activity
(c) Investing activity
(d) Cash and cash equivalent
Solution : (a) Cash received against revenue from service rendered = Operating Activity
(b) Proceeds from issue from debenture = Financing activity
(c) Income tax paid on gain on sale of asset = Investing Activity
(d) Mareketeble securities = Cash and cash equivalent
Correct answer is option 3.
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