Match the transaction classifications in List-I with their corresponding examples in a Cash Flow Statement (AS-3) listed in List-II:List-IList-II(A) Operating activity(I) Bank(B) Investing activity(II) Redemption of preference shares(C) Financing activity(III) Purchase of machinery(D) Cash equivalents(IV) Cash receipt from trade receivables.Choose the correct option from the answers given below:
- A(A) - (I), (B) - (II), (C) - (III), (D) - (IV)
- B(A) - (I), (B) - (III), (C) - (II), (D) - (IV)
- C(A) - (IV), (B) - (III), (C) - (II), (D) - (I)
- D(A) - (III), (B) - (IV), (C) - (I), (D) - (II)
Solution & Step-by-step Explanation
Matching according to Accounting Standard-3 (Cash Flow Statements):Operating Activity (A): Principal revenue-producing activities Cash receipt from trade receivables (IV).Investing Activity (B): Acquisition and disposal of long-term assets Purchase of machinery (III).Financing Activity (C): Activities that alter equity capital and borrowings scale Redemption of preference shares (II).Cash Equivalents (D): Short-term, highly liquid components Bank balance (I).This structural mapping leads directly to sequence (A) - (IV), (B) - (III), (C) - (II), (D) - (I).