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easyMCQCUET UG 2024 Accountancy Question Paper (17-May-2024) (Shift 3)2026Accountancy
1 mark

While preparing Cash Flow Statement, purchase of goodwill is treated as:

  1. A
    Operating activity
  2. B
    Financing activity
  3. C
    Investing activity
  4. D
    Extraordinary item

Solution & Step-by-step Explanation

Goodwill is an intangible asset. The purchase of any long-term asset (tangible or intangible) involves a capital outflow classified under Investing activity in the cash flow framework.

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While preparing Cash Flow Statement, purchase of goodwill is treated as:
A
Operating activity
B
Financing activity
C
Investing activity
D
Extraordinary item

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