Question

Q. 1 With respect to cash flow statement, classify the following activities into financing, investing and operating:

1. Buying goods
2. Purchase of long term investments
3. Loan taken from bank
4. Acquiring a new company
5. Cash paid for new equipment
6. Profit made during the period
7. Cash paid to supplier
8. Further equity issued
9. Bought a new factory building
10. Dividend paid.

Answer 1

1. Buying goods - Operating activities 2. Purchase of long term investments - Investing activities 3. Loan taken from bank - Financing activities 4. Acquiring a new company - Investing activities 5. Cash paid for new equipment - Investing activities 6. Profit made during the period - Operating activities 7. Cash paid to supplier - Operating activities 8. Further equity issued - Financing activities 9. Bought a new factory building - Investing activities 10. Dividend paid. - Financing activities