Which of the following items are application of funds?
(1) Material purchased for manufacturing activities.
(2) Loan from financial company.
(3) Redemption of debentures.
(4) Payment of dividend.

1 and 2 only

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2 and 3 only

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1, 2 and 3 only

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1, 3 and 4 only

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Solution

The correct option is D 1, 3 and 4 only
In case of option (b), the money has been received from a financial company and the funds have not yet been applied to any use but the funds have been received for business purposes; it comes under 'sources of funds' and not 'application of funds'. In all the other options, Funds are utilized. Payments are made. Hence, these are applications of funds.

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Which of the following items are application of funds?(1) Material purchased for manufacturing activities.(2) Loan from financial company.(3) Redemption of debentures.(4) Payment of dividend.

Which of the following items are application of funds?
(1) Material purchased for manufacturing activities.
(2) Loan from financial company.
(3) Redemption of debentures.
(4) Payment of dividend.