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Question
Classify the following activity into operating activities, investing activities, financing activities or cash activities
"Cash credit"
Options
Operating activities
Investing activities
Financing activities
Cash activities
MCQ
Solution
Cash activities
Explanation:
'Cash Activities' refers to short-term, highly liquid investments that are easily convertible into known sums of cash and have a low risk of value fluctuation. As a result, cash equivalents are investments retained for the purpose of meeting short-term cash obligations rather than for investment or other purposes.
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