Advanced AccountingQuestion 5280 of 305
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14. Which of the following would be considered as a 'Cash Flow item from an Investing Activities?

Options

AUnderwriting Commission
BTrade Commission
CPurchase of Goodwill
DInterest on Long Term Borrowings ADVANCED ACCOUNTING
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Correct Answer

Option CPurchase of Goodwill

All Options:

  • AUnderwriting Commission
  • BTrade Commission
  • CPurchase of Goodwill
  • DInterest on Long Term Borrowings ADVANCED ACCOUNTING

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Detailed Solution & Explanation

Under AS 3 (Cash Flow Statements):
1. Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents.
2. Purchase of Goodwill is the acquisition of an intangible long-term asset, which is classified as an investing activity.
3. Underwriting commission and interest on borrowings are financing activities, and trade commission is an operating activity.
Hence, **Option C** is the correct answer.

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