The correct answer is option 2- (A)-(II), (B)-(IV), (C)-(I), (D)-(III).
| LIST 1 |
LIST 2 |
| (A) The Accounting basis for Cash Flow Statement is |
(II) Cash Basis |
| (B) Dividend paid on Equity and Preference capital comes under |
(IV) Cash outflow from Financing Activities |
| (C) It can not be considered as cash and cash equivalents |
(I) Investment in shares |
| (D) It can be classified as cash and cash equivalents |
(III) Treasury bills |
* The Accounting basis for Cash Flow Statement is- The accounting basis for the cash flow statement is the cash basis of accounting. The cash flow statement reports the cash inflows and outflows of a business during a period of time. It is prepared using the cash basis of accounting, which records revenue when cash is received and expenses when cash is paid. The cash basis of accounting is different from the accrual basis of accounting, which is used to prepare the balance sheet and income statement. Under the accrual basis of accounting, revenue is recognized when it is earned, even if cash has not been received, and expenses are recognized when they are incurred, even if cash has not been paid.
*Dividend paid on Equity and Preference capital comes under- Dividend paid on equity and preference capital comes under financing activities in the cash flow statement. Financing activities are the cash flows that arise from the raising and repayment of capital, such as debt and equity. Dividend payments are considered to be a return of capital to shareholders, and therefore they are classified as financing activities.
*It can not be considered as cash and cash equivalents- Cash and cash equivalents are short-term, highly liquid investments that can be easily converted into cash without any significant loss in value. Investments in shares, on the other hand, are long-term investments that are subject to market risk. Additionally, shares are not as easily converted into cash as cash and cash equivalents. Investors may need to sell their shares through a broker, which can take time. Investment in shares is an investing activity.
* It can be classified as cash and cash equivalents- Cash and cash equivalents are short-term, highly liquid investments that can be easily converted into cash without any significant loss in value. Treasury bills are short-term government securities that mature within one year. |
