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mediumMCQCUET Accountancy 2022 15 July Shift 22026Accountancy
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Cash Advance and Loan made to a third party (other than made by a financial enterprise) is classified as:

  1. A
    Outflow from Investing Activities
  2. B
    Outflow from Financing Activities
  3. C
    Inflow from Investing Activities
  4. D
    Inflow from Financing Activities

Solution & Step-by-step Explanation

For non-financial enterprises, giving advances and loans to third parties is an deployment of funds outside core operations, which forms part of Investing Activities. Since cash leaves the business when creating a loan, it is a cash outflow from investing activities.

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Cash Advance and Loan made to a third party (other than made by a financial enterprise) is classified as:
A
Outflow from Investing Activities
B
Outflow from Financing Activities
C
Inflow from Investing Activities
D
Inflow from Financing Activities

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