Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Which of the following is an example of cash flow from investing activity?

Options:

Issue of debenture by the company

Sale of investment by the non-financial enterprise.

Purchase of raw materials for cash

Repayment of a long-term loan

Correct Answer:

Sale of investment by the non-financial enterprise.

Explanation:

Cash Inflows from Investing Activities-
Cash receipt from disposal of fixed assets including intangibles.
Cash receipt from the repayment of advances or loans made to third parties (except in case of financial enterprise).
Cash receipt from disposal of shares, warrants or debt instruments of other enterprises except those held for trading purposes.
Interest received in cash from loans and advances.
Dividend received from investments in other enterprises.