Match List - I with List - II.
| List - I | List - II |
|---|---|
| (A) Operating Activities | (I) Issue of equity shares |
| (B) Investing Activities | (II) Purchase of Marketable securities |
| (C) Financing Activities | (III) Cash sales |
| (D) Cash Equivalent | (IV) Purchase of fixed assets |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A) - (III), (B) - (IV), (C) - (I), (D) - (II)
A cash flow statement sorts every cash flow into operating, investing or financing activities, and treats short-term, highly liquid investments as cash equivalents.
(A) Operating Activities — this matches (III) Cash sales. Selling goods for cash is the main revenue-earning activity of the business.
(B) Investing Activities — this matches (IV) Purchase of fixed assets. Buying long-term assets is an investing outflow.
(C) Financing Activities — this matches (I) Issue of equity shares. Raising owners' capital is a financing inflow.
(D) Cash Equivalent — this matches (II) Purchase of Marketable securities. Marketable securities are readily convertible into cash, so they are part of cash equivalents.
NCERT (2026-27 edition):
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