Practicing Success
Capital gain tax paid by the company on sale of land held as Investment is: |
An outflow under Operating activity An outflow under Investing activity An Inflow under Financing Activity An outflow under Financing activity |
An outflow under Investing activity |
The correct answer is Option (2) - An outflow under Investing activity. The payment of capital gains tax on the sale of an investment, such as land held for investment purposes, can be classified as part of the cash outflow under investing activities. |