Investments made by a financial enterprise with the purpose to resell after the expiry of three months will come under which of the following activity?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Operating Activities.
Investments made by a financial enterprise with the purpose to resell after the expiry of three months will come under Operating Activities.
Investments made by a financial enterprise with the purpose to resell after the expiry of three months:
1) This amount will be qualified as current asset, since it is sold within 12 months.
2) All the cashflows from current assets are recorded as cash flow from operating activities.
3) Hence, investments made by a financial enterprise with the purpose to resell after the expiry of three months will come under operating activity.