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Question : Calculate the resulting cash flow and state the nature of cash flow from the following information: 

Acquired machinery for 3,50,000 by issuing cheque.

 

Option 1:  Investing activity and outflow 3,50,000

Option 2: Investing activity and inflow 3,50,000

Option 3:  Investing activity and no flow

Option 4: Operating activity and outflow 3,50,000


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 13th Jan, 2024

Correct Answer: Investing activity and outflow 3,50,000


Solution : Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Machinery purchased is an Investing Activity and there is an outflow of cash.

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