Question : If a machine whose original cost is Rs.40,000 having accumulated depreciation Rs.12,000, were sold for Rs.34,000 then while preparing Cash Flow Statement its effect on cash flow will be :
Option 1: Cash flow from financing activities Rs.34,000
Option 2: Cash flow from financing activities Rs.6,000
Option 3: Cash flow from investing activities Rs.34,000
Option 4: Cash flow from investing activities Rs.6,000
Answer (1)
21st Jan, 2024
Correct Answer: Cash flow from investing activities Rs.34,000
Solution : Rs.34000 will be shown as cash flow from investing activities because it generates cash flow in the business from the sale of assets.
Hence the correct answer is option 3.
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