Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Where will a bank deposit with 80 days of maturity included in cash flow statement of the company?

Options:

Operating activity

Investing activity

Financing activity

Cash and cash equivalents

Correct Answer:

Cash and cash equivalents

Explanation:

An investment normally qualifies as cash equivalents only when it has a short maturity, of say, three months or less from the date of acquisition.