Match List – I with List – II.
|
LIST I |
LIST II |
|
A. Capital Gain taxes |
I. No flow |
|
B. Buy Back of own shares |
II. Operating Activities |
|
C. Interest paid by financing company |
III. Financing Activities |
|
D. Issue of Bonus shares |
IV. Investing Activities |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) - A-IV, B-III, C-II, D-I.
|
LIST I |
LIST II |
|
A. Capital Gain taxes |
IV. Investing Activities |
|
B. Buy Back of own shares |
III. Financing Activities |
|
C. Interest paid by financing company |
II. Operating Activities |
|
D. Issue of Bonus shares |
I. No flow |
* Capital Gain taxes- Investing Activities.
Capital gains taxes typically arise from the sale of investments such as stocks, bonds, or real estate. This is considered an investing activity because it involves changes in the composition of an entity's investment portfolio.
* Buy Back of own shares- Financing Activities.
Buying back own shares is classified as a financing activity because it involves the use of cash to repurchase shares from shareholders. It affects the equity portion of the balance sheet.
* Interest paid by financing company - Operating Activities.
Interest paid is associated with financing, interest paid is considered part of the day-to-day operational costs of a business who deals in financing.
* Issue of Bonus shares- No flow. The issuance of bonus shares does not involve cash flow. It is a form of distribution of profits to existing shareholders in the form of additional shares without any cash consideration. It doesn't impact the cash flow statement directly.