**what's the answer ??**
Q). 'An enterprise may hold securities and loans for dealing or trading purpose in which case they are similar to inventory acquired specifically for resale'. Is the statement correct ? Cash Flows from such activities will be classified under which type of activity while preparing Cash Flow Statement ?
Dear Student
Yes An enterprise may hold securities and loans for dealing or trading purpose in which case they are similar to inventory acquired specifically for resale if the main business of enterprise is all about trading in such securities .
And we know the transactions related to main business activities are classified as operating activities, therefore, cash flow from such activities shall be classified in operating activities.
Regards
Yes An enterprise may hold securities and loans for dealing or trading purpose in which case they are similar to inventory acquired specifically for resale if the main business of enterprise is all about trading in such securities .
And we know the transactions related to main business activities are classified as operating activities, therefore, cash flow from such activities shall be classified in operating activities.
Regards