| A. Operating Activities | I. Issue of shares |
| B. Investing Activities | II. Bank Balance |
| C. Financing Activities | III. Sale and purchase of goods and services |
| D. Cash and cash equivalent | IV. Buying of fixed assets |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → A-III, B-IV, C-I, D-II
Each item goes with the activity that produces it in a cash flow statement.
A. Operating Activities — this matches III. Sale and purchase of goods and services. Buying and selling goods and services is the main revenue-earning activity of a business.
B. Investing Activities — this matches IV. Buying of fixed assets. Acquiring long-term assets is an investing outflow.
C. Financing Activities — this matches I. Issue of shares. Raising capital from the owners is a financing inflow.
D. Cash and cash equivalent — this matches II. Bank Balance. Money in a bank account (a demand deposit) is part of cash itself.
NCERT (2026-27 edition):
NCERT (2026-27 edition): |
