Question:
Statement– I : Investing activities are the acquisition and disposal of long-term assets
and other investments not included in cash equivalents.
Statement– II : Cash payments to acquire fixed assets including intangibles and capitalised
research and development results in cash outflow from investing activities.
Choose the correct option from the following :
Statement– I : Investing activities are the acquisition and disposal of long-term assets
and other investments not included in cash equivalents.
Statement– II : Cash payments to acquire fixed assets including intangibles and capitalised research and development results in cash outflow from investing activities.
Choose the correct option from the following :
Statement– II : Cash payments to acquire fixed assets including intangibles and capitalised research and development results in cash outflow from investing activities.
Choose the correct option from the following :
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Always remember: investing activities deal with cash flows related to purchase or sale of long-term assets or investments—not day-to-day operations.
Updated On: Jan 14, 2026
- Both the Statements are true
- Both the Statements are false.
- Only Statement I is true.
- Only Statement II is true.
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The Correct Option is A
Solution and Explanation
The correct answer is (A) Both the Statements are true.
Explanation: Investing activities include acquisition or disposal of long-term assets such as property, plant, equipment, intangibles (like patents, goodwill), and long-term investments. Statement II further specifies one type of cash outflow that belongs under investing activities: cash spent on acquiring fixed assets, including intangibles or capitalised R&D costs. Hence, both statements correctly define aspects of investing cash flows.
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