Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Investing Activities includes :

(A) Loan given to third party
(B) Acquire shares warrants
(C) Repayments of amount borrowed
(D) Dividend received from Investment
(E) Issue of shares

Choose the correct answer from the options given below :

Options:

(C), (A) and (D) only

(C), (A) and (E) only

(A), (B) and (D) only

(B), (A) and (C) only

Correct Answer:

(A), (B) and (D) only

Explanation:

The correct answer is Option (3) - (A), (B) and (D) only.

(A) Loan given to third party- This is an investing activity as company has invested money in other person.

(B) Acquire shares warrants- This is an investing activity as company has invested money in securities which will benefit company in future.

(C) Repayments of amount borrowed- This is an financing activity. Amount returned which was borrowed earlier to finance the company.

(D) Dividend received from Investment- Dividend received on investment made by the company in another company is an investing activity.

(E) Issue of shares- Shares are issued by the company to raise funds for the company. Raising finance is a financing activity.