Question

Match List-I with List-II

List-I	List-II
(A) Receipt from royalties, fees, commission and other revenue	(I) Investing Activity
(B) Receipt from Interest and dividends	(II) Operating Activity
(C) Proceeds from issue of preference or equity shares	(III) Cash and Cash equivalent
(D) Current Investment	(IV) Financing Activity

Choose the correct answer from the options given below:

• (A) - (I), (B) - (II), (C) - (III), (D) - (IV)
• (A) - (I), (B) - (II), (C) - (IV), (D) - (III)
• (A) - (II), (B) - (I), (C) - (IV), (D) - (III)
• (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Hint:

Royalty is operating, interest and dividend received are investing, share issue is financing, current investment is a cash equivalent.

Answer 1

The Correct Option is C

Step 1: Method:
Ask what the money is for. Money from day-to-day business is operating. Money from buying or selling long-term assets or earning from them is investing. Money from owners or lenders is financing. Money held in hand or as near-cash is cash equivalent.

Step 2: Apply to A and B:
Royalty, fee and commission come from selling services in the normal course of business, so A is operating (II). Interest and dividend come from money placed in investments, so B is investing (I).

Step 3: Apply to C and D:
Issuing shares brings in capital from owners, so C is financing (IV). A current investment can be encashed quickly with little risk, so D is a cash equivalent (III).

Step 4: Match with the options:
The sequence II, I, IV, III is given only in option 3. The other three options each put A under I or III, which does not fit an operating income.

Final Answer:
Option 3 is correct. \[\boxed{\text{A-II, B-I, C-IV, D-III}}\]