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Purchase of marketable… (Class 12 Accountancy 2026, Q29a)

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AccountancyCBSE Class 12 · Board exam 2026, set 67/1/1 · 1 mark · MCQ

CBSE Class 12 Accountancy 2026: question 29(a)

Set in the CBSE Class 12 board exam of 2026, paper 67/1/1, section B-I, question 29(a), for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q29(a) · 1 mark · MCQCash Flow Statement

Purchase of marketable securities or short term investments are not considered for the preparation of cash flow statement because :

  1. (A)These are current assets
  2. (B)These constitute cash equivalents
  3. (C)These are intangible assets
  4. (D)These are tangible assets

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/1/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

How does AS 3 define cash equivalents?

Hint 2

Is switching cash into a cash equivalent a cash flow?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Short-term, highly liquid investments such as marketable securities are cash equivalents.

  2. Moving cash into cash equivalents is not a cash flow, so it is ignored. Option (B).

    1 mark

Answer: (B) These constitute cash equivalents

Where the marks are

  • Cash equivalents (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Cash Flow Statement, one at a time, marked against the answer key and marking points.Back to the full paper2026 board paper, set 67/1/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.