Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:
An example of cash flow from investing activity is :
Options:
Issue of debenture
Repayment of long-term loan
Sale of investment by non-financial enterprise
None of the above
Correct Answer:
Sale of investment by non-financial enterprise
Explanation:
1 and 2 are financing activities. As per AS-3, investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Investing activities relate to purchase and sale of long-term assets or fixed assets such as machinery, furniture, land and building, etc. Transactions related to long-term investment are also investing activities.