Match List-I with List-II

List-I	List-II
(A) Operating activities	(I) Proceeds from long-term borrowings
(B) Investing activities	(II) Short-term deposit
(C) Financing activities	(III) Rent paid
(D) Cash equivalents	(IV) Proceeds from sale of old machinery

Choose the correct answer from the options given below:

Operating Activities involve the principal revenue-producing activities and day-to-day operations of the business. Rent paid is a regular operational expense incurred in the normal course of business, making it an operating activity.

Match: (A) → (III)

Investing Activities relate to acquisition and disposal of long-term assets and investments. Proceeds from sale of old machinery represents disposal of a fixed asset, which is clearly an investing activity.

Match: (B) → (IV)

Financing Activities involve changes in the size and composition of equity capital and borrowings. Proceeds from long-term borrowings directly affect the capital structure of the business by bringing in borrowed funds.

Match: (C) → (I)

Cash Equivalents are short-term, highly liquid investments readily convertible to cash with insignificant risk of value change. Short-term deposits (typically maturing within 3 months) qualify as cash equivalents due to their high liquidity and easy convertibility.

Match: (D) → (II)

The correct matching is:

• (A) - (III): Operating activities - Rent paid
• (B) - (IV): Investing activities - Proceeds from sale of old machinery
• (C) - (I): Financing activities - Proceeds from long-term borrowings
• (D) - (II): Cash equivalents - Short-term deposit

Correct Answer: Option 4