Question
Accountancy Question on Accounting for Share and Debenture Capital
Match List-I with List-II.
| List-I | List-II |
|---|---|
| (A) Income tax Paid | (I) Operating Activity |
| (B) Dividend Received | (II) Financing Activity |
| (C) Loan Repaid | (III) Investing Activity |
| (D) Shares issued against Machinery | (IV) Not a Cash flow Activity |
A
(A)-(I), (B)- (II), (C)-(III), (D)- (IV)
B
(A)-(I), (B)-(III), (C)-(II), (D)- (IV)
C
(A)-(I), (B)- (II), (C)-(IV), (D)- (III)
D
(A)-(III), (B)- (IV), (C)- (I), (D)- (II)
Answer
(A)-(I), (B)- (II), (C)-(III), (D)- (IV)
Explanation
Solution
- Income Tax Paid (A): This is considered an operating activity as it relates to the day-to day operations of the business.
- Dividend Received (B): This is classified as an investing activity since it is income derived from investments.
- Loan Repaid (C): This is a financing activity because it involves the outflow of cash to repay borrowings.
- Shares issued against Machinery (D): This does not constitute a cash flow activity since it involves a non-cash transaction.