Question:
Statement I: Operating activities are the activities that constitute the primary or main activities of an enterprise.
Statement II: Cash advances and loans made by financial enterprises are usually classified as operating activities.
Choose the correct option from the following:
Statement I: Operating activities are the activities that constitute the primary or main activities of an enterprise.
Statement II: Cash advances and loans made by financial enterprises are usually classified as operating activities.
Choose the correct option from the following:
Show Hint
For a financial enterprise, loans and advances are its main business, so they are operating.
Updated On: Oct 26, 2026
- Both the Statements are false.
- Statement I is true and Statement II is false.
- Statement I is false and Statement II is true.
- Both the Statements are true.
Show Solution
Verified By Collegedunia
The Correct Option is D
Solution and Explanation
Step 1: Understand the question:
Two statements about operating activities are given. We must test each.
Step 2: Check Statement I:
Operating activities are the principal revenue-producing activities of an enterprise. They are the main activities of the business.
This is the standard definition. Statement I is TRUE.
Step 3: Check Statement II:
For a financial enterprise, such as a bank or finance company, giving loans and advances is the main business.
So cash advances and loans made by it are classified as operating activities. Statement II is TRUE.
Step 4: Pick the option:
Both the statements are true. This is option (D).
Option (A) is wrong because both are true. Option (B) is wrong because Statement II is true. Option (C) is wrong because Statement I is true.
Final Answer:
Both the Statements are true. Option (D).
Two statements about operating activities are given. We must test each.
Step 2: Check Statement I:
Operating activities are the principal revenue-producing activities of an enterprise. They are the main activities of the business.
This is the standard definition. Statement I is TRUE.
Step 3: Check Statement II:
For a financial enterprise, such as a bank or finance company, giving loans and advances is the main business.
So cash advances and loans made by it are classified as operating activities. Statement II is TRUE.
Step 4: Pick the option:
Both the statements are true. This is option (D).
Option (A) is wrong because both are true. Option (B) is wrong because Statement II is true. Option (C) is wrong because Statement I is true.
Final Answer:
Both the Statements are true. Option (D).
Was this answer helpful?
0
0
Top CBSE CLASS XII Accountancy Questions
From the following Balance Sheet of Hira Ltd. as at 31st March, 2023, prepare Comparative Balance Sheet:
- On 1st May, 2023, Amrit Ltd. issued 10,000, 10% debentures of ₹100 each at a premium of 10%, redeemable at a premium of 10%. Loss on issue of debentures will be:
- Gupta and Sharma are partners in a firm sharing profit in the ratio of 4:1. They admitted Preeti as a new partner for \( \frac{1}{4} \) share in the profits, which she acquired wholly from Gupta. The new profit sharing ratio of Gupta, Sharma, and Preeti will be:
- On the dissolution of a partnership firm, there were debtors of ₹34,000. Debtors of ₹1,000 became bad, and 60% was realized from the remaining debtors. Which account will be debited and by how much amount on the realization from debtors?
- If vendors are issued fully paid shares of ₹1,25,000 in purchase consideration of net assets of ₹1,50,000, the balance of ₹25,000 will be credited to:
View More Questions
Top CBSE CLASS XII Cash Flow Statement Questions
- From the following details, calculate Cash Flow from Investing Activities: - Purchase of Machinery Rs 1,50,000
- Sale of Land Rs 80,000
- Purchase of Investments Rs 50,000
- Interest received Rs 8,000
- Which of the following transactions will result in ‘Cash Flows from Operating Activities’?
- ‘Sale of Patents’ will result in:
- Statement I: Sale of marketable securities will result in flow of cash.
Statement II: Cash flow implies movement of cash in and out due to some non-cash items.
Choose the correct option from the following: From the following information extracted from the books of Kant Ltd., calculate ‘Cash Flows from Operating Activities’.
View More Questions
Top CBSE CLASS XII Questions
- 2, b, c are in A.P. and the range of determinant $\begin{vmatrix}1&1&1\\ 2&b&c\\ 4&b^{2}&c^{2}\end{vmatrix}$ is [2, 16]. Then find range of c is
- A boy of mass 50 kg is standing at one end of a, boat of length 9 m and mass 400 kg. He runs to the other, end. The distance through which the centre of mass of the boat boy system moves is
- A capillary tube of radius r is dipped inside a large vessel of water. The mass of water raised above water level is M. If the radius of capillary is doubled, the mass of water inside capillary will be
- A circular disc is rotating about its own axis. An external opposing torque 0.02 Nm is applied on the disc by which it comes rest in 5 seconds. The initial angular momentum of disc is
- A circular disc is rotating about its own axis at uniform angular velocity \(\omega.\) The disc is subjected to uniform angular retardation by which its angular velocity is decreased to \(\frac {\omega}{2}\) during 120 rotations. The number of rotations further made by it before coming to rest is
View More Questions