Question

Statement – I: Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Statement – II: Cash payments to acquire fixed assets, including intangibles and capitalised research and development, result in cash outflow from investing activities.

Choose the correct option from the following:

Options

• Both Statements are true.

• Both Statements are false.

• Only Statement I is true.

• Only Statement II is true.

Answer 1

Both Statements are true.

Explanation:

Investing activities involve the purchase and sale of long-term fixed assets such as buildings, plant and machinery, goodwill, furniture, etc. They also include transactions relating to items that are not considered cash equivalents.