Financial activities in a cash flow statement as per AS-7 do not include
A. issue of shares
B. buy back of shares
C. purchase of building
D. dividend paid
Answer: Option C
This Question Belongs to Commerce >> Accounting
Join The Discussion
Comments (2)
Related Questions on Accounting
Accounting provides information on
A. Cost and income for managers
B. Company's tax liability for a particular year
C. Financial conditions of an institutions
D. All of the above
The long term assets that have no physical existence but are rights that have value is known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
Patents, Copyrights and Trademarks are
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The correct answer is:
C. Purchase of building
Explanation:
In a cash flow statement (as per accounting standards like AS-3, not AS-7), activities are classified into:
Operating activities
Investing activities
Financing activities
Financing activities include:
Issue of shares ✅
Buy-back of shares ✅
Dividend paid ✅
These relate to changes in capital structure.
Investing activities include:
Purchase or sale of fixed assets (like buildings) ❌
So, purchase of building falls under investing activities, not financing.
Conclusion:
👉 Option C is correct
The correct answer is:
C. Purchase of building
Explanation:
In a cash flow statement (as per accounting standards like AS-3, not AS-7), activities are classified into:
Operating activities
Investing activities
Financing activities
Financing activities include:
Issue of shares ✅
Buy-back of shares ✅
Dividend paid ✅
These relate to changes in capital structure.
Investing activities include:
Purchase or sale of fixed assets (like buildings) ❌
So, purchase of building falls under investing activities, not financing.
Conclusion:
👉 Option C is correct