Which of the following is an investing activity while preparing a cash flow statement of the company?

A) Cash sales
B) Cash received from trade receivables
C) Purchase of building
D) Sale of building
E) Issue of share capital
F) Buy back of equity shares
G) Dividend paid
H) Interest paid on long-term debentures
I) Cash purchases
J) Cash paid to trade payables

Choose the correct answer from the options given below.

CD

The correct answer is option 2- CD.

A) Cash sales- Operating activity
B) Cash received from trade receivables- Operating activity
C) Purchase of building-Investing activity
D) Sale of building-Investing activity
E) Issue of share capital- Financing activity
F) Buy back of equity shares- Financing activity
G) Dividend paid- Financing activity
H) Interest paid on long-term debentures- Financing activity
I) Cash purchases- Operating activity
J) Cash paid to trade payables- Operating activity

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. Separate disclosure of cash flows from investing activities is important because they represent the extent to which expenditures have been made for resources intended to generate future income and cash flows.