Accountancy Part BCash Flow Statement

Match the lists. List 1 List 2 A. Operating Activities I. Short-term…

Match the lists.

List 1	List 2
A. Operating Activities	I. Short-term Investment
B. Investing Activities	II. Issue of Shares
C. Financing Activities	III. Sale of Goods
D. Cash and Cash Equivalents	IV. Non-Current Investment

Match the above list 1 with list 2.

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → A-III, B-IV, C-II, D-I

(A) Operating Activities — this matches (III) Sale of Goods. Proceeds from sale of goods are the main revenue-producing activity.

(B) Investing Activities — this matches (IV) Non-Current Investment. Purchase and sale of long-term investments are investing cash flows.

(C) Financing Activities — this matches (II) Issue of Shares. Raising share capital changes the owners’ funds.

(D) Cash and Cash Equivalents — this matches (I) Short-term Investment. Highly liquid short-term investments are part of cash equivalents.

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

Extract from the NCERT textbook

NCERT (2026-27 edition):
Cash Flows – “… Cash management includes the investment of excess cash in cash equivalents. Hence, purchase of marketable securities or short-term investment which constitutes cash equivalents is not considered while preparing cash flow statement.”