Match List – I with List – II. LIST I LIST II A. Employee benefit exp… | Accountancy Part B CUET question

Match List – I with List – II.

LIST I	LIST II
A. Employee benefit expenses	I. Investing activity
B. Dividend received	II. Operating activity
C. Loan raised	III. Extraordinary item
D. Proceeds from earthquake disaster management	IV. Financing activity

Choose the correct answer from the options given below :

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → A-II, B-I, C-IV, D-III

AS-3 places each cash flow by the activity it comes from:

(A) Employee benefit expenses — this matches (II) Operating activity. Payments to employees are part of the main business.

(B) Dividend received — this matches (I) Investing activity. For a non-financial company, dividend received is a return on investments.

(C) Loan raised — this matches (IV) Financing activity. Borrowing changes the long-term funds of the company.

(D) Proceeds from earthquake disaster management — this matches (III) Extraordinary item. An earthquake is not a regular event, so its cash flow is shown separately.

NCERT (2026-27 edition):
Cash from Operating Activities

Extract from the NCERT textbook

NCERT (2026-27 edition):
Interest and Dividend – “… In case of a non-financial enterprise, as per AS-3, it is considered more appropriate that payment of interest and dividends are classified as financing activities whereas receipt of interest and dividends are classified as investing activities.”

NCERT (2026-27 edition):
Cash from Financing Activities – “As the name suggests, financing activities relate to long-term funds or capital of an enterprise, e.g., cash proceeds from issue of equity shares, debentures, raising long-term bank loans, repayment of bank loan, etc.”

NCERT (2026-27 edition):
Extraordinary items – “… Extraordinary items are not the regular phenomenon, e.g., loss due to theft or earthquake or flood.”