Question : While preparing a Cash Flow Statement, 'Payment of bonus to the employees' by an insurance company is which type of activity?
Option 1: Operating Activities
Option 2: Investing Activities
Option 3: Financing Activities
Option 4: Cash and cash equivalent
Answer (1)
25th Jan, 2024
Correct Answer: Operating Activities
Solution : Answer = Operating Activities
Payment of bonuses to employees by an insurance company would be classified as an operating activity when preparing the Cash Flow Statement. This expense relates to the company's core operations and is thus categorized under operating activities.
Hence, the correct option is 1.
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