MCQ 1. While preparing cash flow statement, conversion of debt to equity (a) Should be shown as a financing activity. (b) Should be shown as an investing activity. (c) Should not be shown as it is a non-cash transaction. 2. Which of the following would be considered a 'cash-flow item from an "investing" activity'? (a) Cash outflow to the government for taxes. (b) Cash outflow to purchase bonds issued by another company. (c) Cash outflow to shareholders as dividends. 3. All of the following would be included in a company's operating activities except: (a) Income tax payments (b) Collections from customers or Cash payments to suppliers (c) Dividend payments. 4. Hari Uttam, a stock broking firm, received 1,50,000 as premium for forward contracts entered for purchase of equity shares. How will you classify this amount in the cash flow statement of the firm? (a) Operating Activities. (b) Investing Activities. (c) Financing Activities. As per AS 3 on Cash Flow Statements, cash received by a manufacturing company from sale of shares of ABC Company Ltd. should be classified as (a) Operating activity. (b) Financing activity. (c) Investing activity