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Increase of decrease in the Bank balance is ---------
  • a)
    Operating Activity
  • b)
    Cash and Cash Equivalents
  • c)
    Financing Activity
  • d)
    Investing Activity
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Increase of decrease in the Bank balance is ---------a)Operating Activ...
The purchase of a equipment by the cash then it is called the decrease bank balance and then we sale that product to increase the amount in bank
Community Answer
Increase of decrease in the Bank balance is ---------a)Operating Activ...
Explanation:

Increasing or decreasing the bank balance is categorized under Cash and Cash Equivalents in the financial statements. This is because any changes in the bank balance directly impact the cash and cash equivalents of a company.

Operating Activity:
- Operating activities include transactions related to core business operations, such as revenue generation, expenses, and net income. Changes in bank balance are not directly related to operating activities.

Financing Activity:
- Financing activities involve transactions related to raising capital or repaying debts. Changes in bank balance are not typically associated with financing activities.

Investing Activity:
- Investing activities include transactions related to the acquisition and disposal of long-term assets. Changes in bank balance are not directly linked to investing activities unless they involve significant cash transactions related to investments.

Cash and Cash Equivalents:
- Cash and cash equivalents include cash on hand and demand deposits that are readily convertible into cash. Any increase or decrease in the bank balance directly impacts the cash and cash equivalents of a company.

In conclusion, changes in the bank balance fall under the category of Cash and Cash Equivalents in the financial statements as they represent the liquid assets available to a company.
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Increase of decrease in the Bank balance is ---------a)Operating Activityb)Cash and Cash Equivalentsc)Financing Activityd)Investing ActivityCorrect answer is option 'B'. Can you explain this answer?
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