Question : Purchase of fixed assets against issue of shares; 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)
10th Jan, 2024
Correct Answer: No flow
Solution : Answer = No flow
When Fixed assets are purchased and payment is made by issuing equity shares will be neither an inflow nor outflow of cash.
The purchase of fixed assets against the issue of shares would result in no flow of cash and cash equivalents. This transaction involves an exchange of one asset (shares) for another (fixed assets) without any involvement of cash, thereby resulting in no change in the cash position.
Hence, the correct option is 3.
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