There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion: Purchase and sale of shares by a broker on behalf of customers is an operating activity.
Reasoning: The brokers charge brokerage for their services.
Answer & explanation
Correct answer: option 2
Cash flows arising from the purchase and sale of dealing or trading securities are classified as operating activities as it is their main revenue generating activity.