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1 mark

Cash advances and loans made by financial enterprises are usually classified as ___________ activity in a Cash Flow Statement.

  1. A
    Financing Activity
  2. B
    Operating Activity
  3. C
    Investing Activity
  4. D
    Promotional Activity

Solution & Step-by-step Explanation

For a financial enterprise/company (like a bank or lending firm), lending money, issuing loans, and dealing with advances form part of their primary revenue-producing behavior. Thus, as per AS 3, these flows fall under Operating Activities.

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Cash advances and loans made by financial enterprises are usually classified as ___________ activity in a Cash Flow Statement.
A
Financing Activity
B
Operating Activity
C
Investing Activity
D
Promotional Activity

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