S1: In a cash flow statement, the purchase of an investment in the shares of another company is classified under investing activities. S2: The receipt of dividends on those shares is always classified under operating activities. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: In a cash flow statement, the purchase of an investment in the shares of another company is classified under investing activities. S2: The receipt of dividends on those shares is always classified under operating activities. Which statement(s) is/are correct?
A. S1 only
B. Neither S1 nor S2
C. S2 only
D. Both S1 and S2
Answer: Option A
Solution (By JKSSB Mock Tests)
S1 is correct; purchasing investments is an investing activity. S2 is incorrect because under Ind AS 7, dividends received can be classified as either operating (as a return on investments) or investing (as a return on investments) activities, providing flexibility.
Under the Income Tax Act, the 'TDS' on payment of professional fees exceeding ₹30,000 in a financial year is governed by which section, and what is the rate for individuals/HUFs?
Explanation:
Section 194J mandates TDS at 10% on fees for professional services (and technical services) if the payment exceeds ₹30,000 in a financial year.
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