CS Executive · Corporate Accounting and Financial Management · Cash Flows
As defined in Ind AS 7 and AS 3, operating activities are:
Operating activities are the entity's principal revenue-producing activities together with other activities that are not investing or financing activities. Purchase of long-term assets is investing, and borrowings or share capital are financing, so they are excluded from operating activities.
- AOnly the activities relating to purchase and sale of long-term assets
- BThe principal revenue-producing activities of the entity and other activities that are not investing or financing activitiesCorrect
- COnly those activities that result in changes in the size and composition of borrowings
- DActivities relating to issue of share capital and repayment of debentures
Explanation
The standards define operating activities as the principal revenue-producing activities of the entity and other activities that are not investing or financing activities. Options about long-term assets describe investing activities, while borrowings and share capital describe financing activities.
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