T.S. Grewal Class 12 Vol 3 2025-2026 Solutions Chapter 5 - Cash Flow Statement

Question 1

Identify the transactions as belonging to (i) Operating Activities, (ii) Investing Activities, (iii) Financing Activities, and (iv) Cash and Cash Equivalents: (a) Cash Sale of Goods; (b) Cash Received against Revenue from Services Rendered; (c) Cash Purchase of Goods; (d) Cash Paid against Services Taken; (e) Patents Purchased; (f) Marketable Securities; (g) Bank Overdraft; (h) Proceeds from Issue of Debentures; (i) Purchase of Shares; (j) Repayment of Long-term Loan; (k) Commission Received; (l) Redemption of Debentures; (m) Interest on Debentures; (n) Interest on Investments; (o) Income Tax Paid; (p) Income Tax Paid on Gain on Sale of Asset; (q) Cash Received from Debtors; (r) Cash Paid to Creditors.

Solution

Note: Income tax is ordinarily classified as an operating activity, unless it can be specifically identified with a financing or investing activity, in which case it is classified accordingly — hence tax paid on the gain from a sale of asset is classified as an Investing Activity.