Commerce Exam > Commerce Questions > Refund of income tax is the part of _________...
Start Learning for Free
Refund of income tax is the part of __________
- a)Financing Activities
- b)Operating Activities
- c)Both Investing Activities and Financing Activities
- d)Investing Activities
Correct answer is option 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
Refund of income tax is the part of __________a)Financing Activitiesb)...
Operating activities are the functions of a business directly related to providing its goods and/or services to the market. These are the company's core business activities, such as manufacturing, distributing, marketing, and selling a product or service.
View all questions of this test
Most Upvoted Answer
Refund of income tax is the part of __________a)Financing Activitiesb)...
It is because when we are deducting the tax from the operating profit refund of tax is added to the tax because it is an inflow of cash in the organisation
Free Test
FREE
| Start Free Test |
Community Answer
Refund of income tax is the part of __________a)Financing Activitiesb)...
Refund of income tax is part of Operating Activities.
Explanation:
Operating Activities are the main revenue-generating activities of a business. They involve the day-to-day operations of the company, such as sales, purchases, and expenses. Income tax refunds are a result of overpayment of taxes previously paid by the company. When a company overpays its income tax, it can file for a refund to receive the excess amount back.
Refund of income tax falls under the category of operating activities for the following reasons:
1. Direct impact on cash flow: When a company receives a refund of income tax, it directly impacts the cash flow of the business. The refund is usually received in the form of cash, which is an essential component of operating activities.
2. Reversal of tax expense: Income tax is considered an expense in the financial statements. When a company receives a refund of income tax, it effectively reverses the tax expense that was initially recorded. This reversal is reflected in the income statement, which is a part of the operating activities.
3. Related to day-to-day operations: Income tax refunds are directly related to the company's day-to-day operations. They are a result of the company's tax planning and payment activities. Therefore, they are considered a part of the operating activities.
4. Reported in the operating section of the cash flow statement: In the cash flow statement, income tax refunds are reported in the operating section. This section includes all cash flows related to the core operations of the business, including sales, purchases, and expenses.
In conclusion, income tax refunds are considered a part of operating activities because they directly impact the cash flow, reverse the tax expense, are related to day-to-day operations, and are reported in the operating section of the cash flow statement.
Explanation:
Operating Activities are the main revenue-generating activities of a business. They involve the day-to-day operations of the company, such as sales, purchases, and expenses. Income tax refunds are a result of overpayment of taxes previously paid by the company. When a company overpays its income tax, it can file for a refund to receive the excess amount back.
Refund of income tax falls under the category of operating activities for the following reasons:
1. Direct impact on cash flow: When a company receives a refund of income tax, it directly impacts the cash flow of the business. The refund is usually received in the form of cash, which is an essential component of operating activities.
2. Reversal of tax expense: Income tax is considered an expense in the financial statements. When a company receives a refund of income tax, it effectively reverses the tax expense that was initially recorded. This reversal is reflected in the income statement, which is a part of the operating activities.
3. Related to day-to-day operations: Income tax refunds are directly related to the company's day-to-day operations. They are a result of the company's tax planning and payment activities. Therefore, they are considered a part of the operating activities.
4. Reported in the operating section of the cash flow statement: In the cash flow statement, income tax refunds are reported in the operating section. This section includes all cash flows related to the core operations of the business, including sales, purchases, and expenses.
In conclusion, income tax refunds are considered a part of operating activities because they directly impact the cash flow, reverse the tax expense, are related to day-to-day operations, and are reported in the operating section of the cash flow statement.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Top Courses for CommerceView all
Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer?
Question Description
Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. 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 Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer?.
Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. 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 Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer?.
Solutions for Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Refund of income tax is the part of __________a)Financing Activitiesb)Operating Activitiesc)Both Investing Activities and Financing Activitiesd)Investing ActivitiesCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup