Question

AA Securities Ltd., a Stock broking company purchased 10,000 Equity Shares of Tata Tea Ltd. Under which activity it will be shown?

Answer 1

For a stock broking company like AA Securities Ltd., buying and selling shares, securities, and financial instruments is part of its ordinary course of business (principal revenue-producing activity) rather than an investment. Therefore, the purchase of these equity shares is classified as an operating cash flow, similar to an ordinary business buying raw materials or inventory.