Accountancy Part BCash Flow Statement

Match List-I with List-II. LIST I LIST II (A) Operating Activities (I…

Match List-I with List-II.

LIST I	LIST II
(A) Operating Activities	(I) Current Investment
(B) Investing Activities	(II) Dividends paid on equity and preference capital
(C) Financing Activities	(III) Cash receipt from disposal of fixed assets including intangibles
(D) Cash Equivalents	(IV) Cash receipts from royalties, fees, commissions and other revenues

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → (A)-(IV), (B)-(III), (C)-(II), (D)-(I)

(A) Operating Activities — this matches (IV) Cash receipts from royalties, fees, commissions and other revenues. These are revenues of the main business.

(B) Investing Activities — this matches (III) Cash receipt from disposal of fixed assets including intangibles. Fixed assets are long-term resources, so selling them is an investing inflow.

(C) Financing Activities — this matches (II) Dividends paid on equity and preference capital. Dividends are a return to the providers of capital.

(D) Cash Equivalents — this matches (I) Current Investment. Short-term, highly liquid investments that can be turned into cash at once are treated like cash.

NCERT (2026-27 edition):
Classification of Activities for the Preparation of Cash Flow Statement

Extract from the NCERT textbook

NCERT (2026-27 edition):
Cash and Cash Equivalents – “… 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.”