Question

Which of the following statements is correct?

Options

• Investments in shares are excluded from cash equivalents unless they are in, substance, cash equivalents.

• Short-term marketable securities which can be readily converted into cash are not treated as cash equivalents.

• In case of a financial enterprise, interest received, and dividend received are classified as investing activities while dividend paid and interest paid on debentures are operating activities.

• Provision for tax made during the year should be classified as an outflow from operating activity.

Answer 1

Investments in shares are excluded from cash equivalents unless they are in, substance, cash equivalents.