Question : The issue of 9% Debentures to a vendor for the purchase of machinery of Rs. 50,000 will result in inflow outflow or no flow of cash while preparing Cash Flow Statement __________.
Option 1: Inflow
Option 2: Outflow
Option 3: No changes
Option 4: Cash and cash equivalents
Correct Answer: No changes
Solution : Answer = No changes
The issue of 9% Debentures to a vendor for the purchase of machinery of Rs. 50,000 will result in no flow of cash while preparing the Cash Flow Statement. This transaction involves the issuance of debentures in exchange for machinery, which does not involve the movement of cash. Hence, the correct option is 3.
Question : Purchase of fixed assets against issue of shares; would result in inflow/outflow/no flow of Cash and Cash Equivalents
Question : Sale of fixed assets (Book value Rs. 50,000 ) at a loss of Rs. 5,000, would result in inflow/outflow/no flow of Cash and Cash Equivalents:
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