Match the following regarding the cash flow statement.

Choose the correct answer from the options given below.

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

The correct answer is option 4- A-I, B-II, C-III, D-IV.

* Royalty received- Cash flows from operating activities primarily stem from the core operations of the business. They mainly arise from transactions and events that contribute to the determination of net profit or loss. Examples of cash flows from operating activities encompass:
Cash Inflows from Operating Activities:
* Cash received from the sale of products and provision of services.
* Cash received from royalties, fees, commissions, and other sources of income.

* Purchase of building- The distinct presentation of cash flows from investing activities holds significance as it provides insights into the allocation of resources aimed at generating future income and cash inflows. Examples of cash flows stemming from investing activities encompass:
Cash Outflows from Investing Activities:
* Cash payments directed towards acquiring fixed assets, including intangible assets and capitalized research and development.
* Cash payments made to procure shares, warrants, or debt instruments of other entities, excluding instruments held for trading objectives.

* Payment of corporate dividend - Financing activities center around the management of long-term funds or capital within an enterprise. These activities involve actions such as acquiring or repaying capital and borrowings. These financial activities can significantly impact the size and structure of the owners' capital and liabilities.
Cash Inflows from Financing Activities:
* Receipt of cash resulting from the issuance of equity shares.
* Receipt of cash from issuing debentures, loans, bonds, and other short or long-term borrowings.
Cash Outflows from Financing Activities:
* Cash repayments made to settle borrowed amounts.
* Cash payments of interest on debentures and long-term loans.
* Cash dividends distributed on both equity and preference capital.

* Short-term deposits in bank- The cash flow statement shows inflows and outflows of cash and cash equivalents from various activities of an enterprise during a particular period. As per AS-3, ‘Cash’ comprises cash in hand and demand deposits with banks, and ‘Cash equivalents’ means short-term highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. 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.