Match List – I with List – II. LIST I LIST II A. Capital Gain taxes I… | Accountancy Part B CUET question

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

(A) Capital Gain taxes — this matches (IV) Investing Activities. Tax on a capital gain arises from selling a fixed asset, so it goes with that investing flow.

(B) Buy Back of own shares — this matches (III) Financing Activities. Buy-back reduces the owners’ capital.

(C) Interest paid by financing company — this matches (II) Operating Activities. For a financial enterprise, lending and borrowing is the main business, so interest paid is operating.

(D) Issue of Bonus shares — this matches (I) No flow. Bonus shares are issued out of reserves; no cash comes in or goes out.

NCERT (2026-27 edition):
Taxes on Income and Gains

Extract from the NCERT textbook

NCERT (2026-27 edition):
Classification of Cash Inflows and Cash Outflows Activities

Extract from the NCERT textbook

NCERT (2026-27 edition):
Interest and Dividend – “… In case of a financial enterprise (whose main business is lending and borrowing), interest paid, interest received and dividend received are classified as operating activities while dividend paid is a financing activity.”

NCERT (2026-27 edition):
Non-cash Transactions – “… As per AS-3, investing and financing transactions that do not require the use of cash or cash equivalents should be excluded from a cash flow statement.”

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

(A) Capital Gain taxes — this matches (IV) Investing Activities. Tax on a capital gain arises from selling a fixed asset, so it goes with that investing flow.

(B) Buy Back of own shares — this matches (III) Financing Activities. Buy-back reduces the owners’ capital.

(C) Interest paid by financing company — this matches (II) Operating Activities. For a financial enterprise, lending and borrowing is the main business, so interest paid is operating.

(D) Issue of Bonus shares — this matches (I) No flow. Bonus shares are issued out of reserves; no cash comes in or goes out.

NCERT (2026-27 edition):
Taxes on Income and Gains

Extract from the NCERT textbook

NCERT (2026-27 edition):
Classification of Cash Inflows and Cash Outflows Activities

Extract from the NCERT textbook