Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Which of the following is an example of cash flow from operating activity?

Options:

Purchase of own debenture

Sale of fixed assets

Interest paid on term-deposits by a bank

Issue of equity share capital

Correct Answer:

Interest paid on term-deposits by a bank

Explanation:
Interest paid on term deposits is an operating expense for the bank and is considered a cash outflow from its core operating activities. Operating activities involve the primary revenue-producing activities of an entity.