Question

While preparing the cash flow statement, match the following activities:

Group A	Group B
1. Payment of cash for purchase of Debentures by a Financing Company	(A) Financing Activity.
2. Purchase of Goodwill	(B) Investing Activity.
3. Dividend paid by manufacturing company	(C) Operating Activity.

Select the correct answer using the codes given below:

Options

• 1 - C, 2 - A, 3 - B.

• 1 - B, 2 - A, 3 - C.

• 1 - A, 2 - B, 3 - C.

• 1 - C, 2 - B, 3 - A.

Answer 1

1 - C, 2 - B, 3 - A.

Explanation:

Group A	Group B
1. Payment of cash for purchase of Debentures by a Financing Company	(C) Operating Activity.
2. Purchase of Goodwill	(B) Investing Activity.
3. Dividend paid by manufacturing company	(A) Financing Activity.