Question : Issue of Equity Shares against the purchase of machinery would result in :
Option 1: Cash Inflow
Option 2: Cash Outflow
Option 3: No Flow of Cash
Option 4: None of the Above
Answer (1)
12th Jan, 2024
Correct Answer: No Flow of Cash
Solution : No, while generating a cash flow statement, the purchase of machinery through the issuance of equity shares is not taken into account. This is due to the fact that in the scenario described above, there is no cash flow, leaving the Cash Flow Statement untouched.
Hence the correct answer is option 3.
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