Question

'Paid ₹ 5,00,000 to acquire shares in Neligare Industries and received a dividend of ₹ 30,000 after acquisition.' This transaction will result in:

Hint:

Investing activities primarily involve the acquisition and disposal of long-term assets such as shares and securities.

Answer 1

The transaction involves the acquisition of shares, which is an investment activity. Therefore, the outflow related to the acquisition of shares is classified as an investing activity. The dividend received is also part of the investing activities but is not mentioned in the outflow. Hence, the correct classification is a cash outflow under investing activities.