Identify which of the following transactions is: a) Operating Activity; b) Investing Activity; c) Financing Activity, and d) Cash and Cash Equivalents
Identify which of the following transactions is: a) Operating Activity; b) Investing Activity; c) Financing Activity, and d) Cash and Cash Equivalents:
i) Redemption of Preference Shares
ii) Purchase of Patents
iii) Selling Expenses
iv) Sale of Goodwill
v) Fixed Deposit with Bank
vi) Sale of Investments
vii) Cash Paid to Creditors
viii) Issue of Shares
ix) Loan taken
x) Salaries paid
xi) Marketing Expenses
xii) Marketable Securities
Anurag Pathak Changed status to publish November 28, 2023
Answer:-
Operating Activity
iii), vii), x), xi)
Operating Activities are the principal revenue producing activities of the enterprise
Investing Activity
ii), iv), vi)
Investing Activities are the acquisition and disposal of long-term assets
Financing Activity
i, viii), ix),
Financing Activities are the activities that result in changes in the size and composition of the owners’ capital (including preference share capital in the case of a company) and borrowings of the enterprise.
Cash and Cash Equivalents
v), xii)
Cash Equivalents are short-term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in value.
Anurag Pathak Changed status to publish November 28, 2023
