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Question
Sale of investment by a finance company is classified as ______.
Options
Cash Equivalents.
Investing Activity.
Financing Activity.
Operating Activity.
MCQ
Fill in the Blanks
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Solution
Sale of investment by a finance company is classified as operating activity.
Explanation:
For a finance company, dealing with shares, loans, and investments is their main, daily business. Since buying and selling investments is their principal revenue-earning work, it is counted under Operating Activities. For any other normal company, this would be an investing activity, but a financial firm treats it as part of their day-to-day operations.
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