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
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.
Question : While preparing Cash Flow Statement what type of activity is, 'Payment of Cash to acquire Debentures by an Investment company'?
Question : 'Loans and advances granted' by a company will be considered, as which type of activity while preparing a Cash Flow Statement.
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