CUET Preparation Today
| An example of cash flow from operating activity for a financial institution is : |
Interest paid on term-deposits by a bank Sale of fixed assets Purchase of own debenture None of the above |
| Interest paid on term-deposits by a bank |
| An enterprise can possess securities and loans for either dealing or trading intentions. In both scenarios, these holdings constitute inventory that is earmarked for eventual resale. Consequently, the cash flows originating from the acquisition and disposal of such securities for dealing or trading are categorized as operating activities. Similarly, when financial enterprises extend cash advances and loans, these transactions are typically labeled as operating activities since they directly pertain to the core operations of those financial entities. Lending is operational activity of banks. |
