Identify which of the following transactions are: (a) Operating Activity; (b) Investing Activity (c) Financing Activity, and (d) Cash and Cash Equivalents
Identify which of the following transactions are: (a) Operating Activity; (b) Investing Activity (c) Financing Activity, and (d) Cash and Cash Equivalents:
(i) Cash Sales
(ii) Cash Purchases
(iii) Salary and Wages
(iv) Cash in Hand
(v) Cash at Bank
(vi) Cash Credit
(vii) Computer Maintenance Expenses
(viii) Purchase of Investments
(ix) Dividend received
(x) Dividend paid
(xi) Issue of Shares
(xii) Bank Overdraft
Anurag Pathak Changed status to publish November 28, 2023
Answer:-
I) Operating Activity
a), b), c), g)
Operating Activities are the principal revenue-producing activities of the enterprise
ii) Investing Activity
h), i),
Investing Activities are the acquisition and disposal of long-term assets
iii) Financing Activity
f), j), k), l)
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.
iv) Cash and Cash Equivalents
d), e),
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
