Match List-I with List-II

List-I	List-II
(Type of Activity)	(Transaction)
(A) Operating Activity	(I) Interest Paid on long-term borrowings
(B) Financing Activity	(II) Cash Credit
(C) Investing Activity	(III) Rent received on property held as investment.
(D) Cash Equivalents	(IV) Cash purchases

Choose the correct answer from the options given below:

(A) Operating Activity → (IV) Cash purchases

Operating activities are the principal revenue-generating activities of the enterprise. Cash purchases of inventory or goods for resale fall under operating activities as they are part of the regular business operations.

(B) Financing Activity → (I) Interest Paid on long-term borrowings

Financing activities result in changes in the size and composition of the capital and borrowings. Interest paid on long-term borrowings is classified as a financing activity since it relates to the cost of obtaining financial resources for the business.

(C) Investing Activity → (III) Rent received on property held as investment

Investing activities involve acquisition and disposal of long-term assets and investments. Rent received on property held as investment is income from long-term investments, hence classified under investing activities.

(D) Cash Equivalents → (II) Cash Credit

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash. Cash credit is a short-term borrowing facility available on demand and is treated as part of cash and cash equivalents for cash flow statement purposes.

Correct matching: (A) - (IV), (B) - (I), (C) - (III), (D) - (II)

Option 4 is correct.