Question:medium

Purchase of land using a cheque is classified as: (Cash Flow Statement question)

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Investing activities involve the purchase and sale of long-term assets. Any payment for acquiring assets such as land is classified as an investing activity in the cash flow statement.
Updated On: Mar 26, 2026
  • Operating Activity
  • Investing Activity
  • Financing Activity
  • Non-Cash Activity
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The Correct Option is B

Solution and Explanation

Acquiring land constitutes an investing activity. The cash flow statement categorizes investing activities to encompass the procurement and sale of long-term assets, including land, structures, and machinery. The use of a cheque signifies a cash outflow linked to an investment in long-term assets.
Consequently, the purchase of land via cheque is categorized under Investing Activity.
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