Question : An increase in Bank Overdraft, would result in inflow/outflow/no flow of Cash and Cash Equivalents ___________.
Option 1: Inflow
Option 2: outflow
Option 3: No flow
Option 4: none of the above
Answer (1)
22nd Jan, 2024
Correct Answer: outflow
Solution : Answer = Outflow
An increase in bank overdraft would result in an outflow of cash and cash equivalents. An increase in overdraft means the company is borrowing more from its bank, resulting in additional cash being withdrawn from the account, which decreases the cash balance.
Hence, the correct option is 2.
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