Question

'Paid ₹ 5,00,000 to acquire shares in Neligare Industries and received a dividend of ₹ 30,000 after acquisition.' This transaction will result in:

Hint:

Investing activities primarily involve the acquisition and disposal of long-term assets such as shares and securities.

Answer 1

The acquisition of shares constitutes an investment. Consequently, the cash outflow associated with this share acquisition is categorized as an investing activity. Dividends received are also investing activities, though not part of the outflow. Therefore, the classification is a cash outflow within investing activities.