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Question : Acquisition of fixed asset by issue of debentures or shares is an example of --------------------

Option 1: Non-cash transactions.

Option 2: Cash transactions.

Option 3: Both 1 and 2

Option 4: None of the above


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 26th Jan, 2024

Correct Answer: Non-cash transactions.


Solution : Answer = Non-cash transactions.

When assets are purchased and payment is made by issuing equity shares, it is a non-cash transaction in this case neither inflow nor outflow of cash. Acquisition of fixed assets by issuing debentures or shares is classified as a non-cash transaction because it involves exchanging securities for assets without involving actual cash inflows or outflows.
Hence, the correct option is 1.

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