Match List – I with List – II.

Choose the correct answer from the options given below :

(A)-(III), (B)-(IV), (C)-(II), (D)-(I)

The correct answer is Option (1) → (A)-(III), (B)-(IV), (C)-(II), (D)-(I)

* Purchase of Building - Investing activity. The purchase of a building is generally classified as an investing activity because it involves the acquisition of a long-term asset that is not part of the day-to-day operations of the business.

* Change in inventory - Operating activity. Changes in inventory are typically classified as operating activities since they relate to the core operations of the business. An increase in inventory consumes cash (outflow), while a decrease generates cash (inflow).

* Cash in hand - Cash and cash equivalents. Cash in hand is part of the cash and cash equivalents.

* Dividend paid - Financing activity. Payment of dividends is usually classified as a financing activity. It involves distributing profits to the shareholders, representing a return on their investment and is considered a financing outflow.