Cash proceeds from issue of debentures is ________. (Fill in the blank by choosing correct option)
1) financial activity
2) non financial activity
3) operating activity
4) trading activity
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Cash proceed from issue of debenture is financial activity
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Answer:
Operating Activity
Debentures are type of dept instrument that the comapy gives to those who have their money.
It it of non collateral agreement.
Explanation:
Debentures has got the follwing charactersitics:
- It is unconditional , that is, it is for the one party agreement and hence does not need the consent of the other party.
- It is a written document .
- It gives date and time on which the debt should be settled.
- It has strong terms and conditions.
- It is normally written in official language and hence has got no other strong terms and condition.
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