Question:
The transaction ‘Capital Gains Tax paid on sale of fixed assets’ is classified under which of the following?
The transaction ‘Capital Gains Tax paid on sale of fixed assets’ is classified under which of the following?
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Taxes related to gains or losses from asset sales are classified under investing activities as they pertain to long-term assets.
Updated On: Jan 20, 2025
- Operating Activities
- Investing Activities
- Financing Activities
- Cash and Cash Equivalents
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The Correct Option is B
Solution and Explanation
Capital gains tax is directly related to the sale of fixed assets, which falls under investing activities. Hence, it is classified as an outflow under investing activities.
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