Question

Which of the following transactions is NOT a cash flow from investing activity?

Options

• Sale of machinery for cash ₹ 90,000.

• Purchase of goodwill ₹ 5,00,000.

• Purchase of marketable securities for cash ₹ 20,000.

• Sale of furniture for ₹ 43,000 for cash

Answer 1

Purchase of marketable securities for cash ₹ 20,000.

Explanation:

Investing activities involve buying or selling long-term assets like machinery, furniture, or goodwill. However, marketable securities are classified as cash equivalents because they are highly liquid and short-term. Since they are treated as “cash” itself, buying or selling them is not considered an investing activity, but simply a movement within the cash balance.