Match List I with List II

Choose the correct answer from the options given below:

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

The correct answer is Option (4) → A-II, B-III, C-IV, D-I.

A. Operating Activities- II. Cash Paid to Supplier.
Operating activities include the core business activities that generate revenue and incur expenses. Cash paid to suppliers is a typical cash outflow from the day-to-day operations of the business, related to purchasing goods or services required for operations.

B. Investing Activities- III. Sale of Land.
Investing activities involve the acquisition and disposal of long-term assets and investments. This includes the purchase or sale of physical assets like property, plant, equipment, or financial investments. The sale of land falls under investing activities because land is a long-term asset. The cash inflow from selling the land is considered an investment activity, as it involves a change in the company’s long-term assets.

C. Financing Activities- IV. Increase in Share Capital.
Financing activities include transactions that affect the company’s equity and debt structure. This includes issuing or repurchasing stock, borrowing, or repaying debt. An increase in share capital represents a financing activity because it involves raising funds by issuing new shares. This action affects the company’s equity structure and is considered a financing activity since it raises capital for the business.

D. Non Cash item- I.  Depreciation.
Non-cash items are transactions that affect the financial statements but do not involve actual cash flows. Depreciation is one such non-cash item, as it is an expense recorded on the income statement but doesn't result in any immediate cash outflow.