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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.
Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false .
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A)...
- The issue of Equity and preference share capital for cash only. The issue of Debentures, Bonds and long-term note for cash only.
- A company's cash flow from financing activities refers to the cash inflows and outflows resulting from the issuance of debt, the issuance of equity, dividend payments, and the repurchase of existing stock.
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Directions : In the following questions, a statement of Assertion (A)...
Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.
Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.
Explanation:
Assertion (A) is true because proceeds from the issue of shares and debentures are considered as a source of financing for a company. When a company issues shares, it receives cash from investors in exchange for ownership in the company. Similarly, when a company issues debentures, it borrows money from investors and promises to repay the principal amount along with interest in the future. Both these activities involve generating funds for the company.
Reason (R) is the correct explanation of Assertion (A) because the primary purpose of issuing shares and debentures is to raise funds for the company. These funds can be used for various purposes such as funding expansion projects, acquiring assets, paying off debt, or meeting working capital requirements. The cash inflow or outflow from the issue of shares and debentures is classified as a financing activity in the statement of cash flows.
Financing activities include transactions that result in changes in the size and composition of the company's equity and borrowings. It involves activities like issuing or repurchasing shares, issuing or redeeming debentures, obtaining or repaying loans, and paying dividends.
Examples of financing activities:
- Proceeds from issuing shares
- Proceeds from issuing debentures
- Repayment of borrowings
- Payment of dividends
- Repurchase of shares
In conclusion, proceeds from the issue of shares and debentures are recorded in the financing activity section of the statement of cash flows because they represent cash inflows or outflows made to finance the company's operations and investments. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.
Explanation:
Assertion (A) is true because proceeds from the issue of shares and debentures are considered as a source of financing for a company. When a company issues shares, it receives cash from investors in exchange for ownership in the company. Similarly, when a company issues debentures, it borrows money from investors and promises to repay the principal amount along with interest in the future. Both these activities involve generating funds for the company.
Reason (R) is the correct explanation of Assertion (A) because the primary purpose of issuing shares and debentures is to raise funds for the company. These funds can be used for various purposes such as funding expansion projects, acquiring assets, paying off debt, or meeting working capital requirements. The cash inflow or outflow from the issue of shares and debentures is classified as a financing activity in the statement of cash flows.
Financing activities include transactions that result in changes in the size and composition of the company's equity and borrowings. It involves activities like issuing or repurchasing shares, issuing or redeeming debentures, obtaining or repaying loans, and paying dividends.
Examples of financing activities:
- Proceeds from issuing shares
- Proceeds from issuing debentures
- Repayment of borrowings
- Payment of dividends
- Repurchase of shares
In conclusion, proceeds from the issue of shares and debentures are recorded in the financing activity section of the statement of cash flows because they represent cash inflows or outflows made to finance the company's operations and investments. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Proceeds from Issue of Shares and Debentures are recorded in Financing Activity.Reason (R): Issue of shares and debentures are the cash inflow or outflow made to finance the company.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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