Question

Sale of copy rights are considered as a part of

• A. Investing Activities
• B. Financing Activities
• C. Operating Activities
• D. Financing & Operating Activities

Answer 1

The Correct Option is A

In the context of accounting and financial reporting, activities of a business are typically categorized into three main types: operating, investing, and financing activities. Each of these activities reflects different aspects and purposes of a company’s financial operations.

When we consider the sale of copyrights:

• Operating Activities: These are the principal revenue-producing activities of the enterprise and other activities that are not investing or financing. It primarily includes receipts and payments related to the core business functions.
• Financing Activities: These activities result in changes in the size and composition of the equity capital and borrowings of the entity. Essentially, it deals with how the business finances its operations, either through debt or equity.
• Investing Activities: This involves the acquisition and disposal of long-term assets and other investments not included in cash equivalents. The sale of copyrights falls under this category, as copyrights are considered intangible assets. The sales transactions involve either gaining or losing such assets, which characteristically signify cash flow originating from investing activities.

Options	Part of Which Activity?
Sale of Copy Rights	Investing Activities

Thus, the sale of copyrights is classified under Investing Activities as it involves the disposal of an asset.