As per accounting standard-3 cash flow is classified into
Answers
as per accounting standard 3(revised) - cash flow statement is classified into 3 types
1) cash flow from operating activities -
These are the main activities in which it deals by the company . Cash flows arising from these activities are called the cash flows from operating activities. Cash flows from operating activities are the main source of revenue for a business concern.
eg. for a company dealing in manufacture of electronics, selling of electronic parts or finished products are the principal revenue producing activities of the concern. For a finance company, giving and taking of loans, purchase and sale of securities are the main revenue producing activities.
2) cash flow from investing activities -
For carrying out business smoothly, an enterprise acquires long term assets like machinery, furniture, land and building. Similarly old assets are sold and new are purchased.They sometimes also invest idle funds outside the business to get additional earnings. All this results in inflow and outflow of cash. Thses flows of cash are termed as Cash flows from Investing Activities.
Examples-
– Cash paid to acquire fixed assets eg. machinery, land etc,
-Cash paid to purchase investments eg. shares and debentures of other companies.
-Cash receipts from the disposal of fixed assets.
-Cash receipts as dividend or income on investments outside the concern.
3) cash flow from financing activities -
The transactions which are undertaken to arrange capital and other sources of finance for the enterprise are termed as financing activities.
Examples-
-Cash proceeds from the issue of shares or debentures and other debt instruments.
-Cash paid for the redemption of debentures.
-Cash paid for buyback of shares.
Hope its useful ..!!!
Ans: 1. Operating Activities.
2. Investing Activities.
3. Financing Activities