Question : Cash Outflow arises when the net effect of transaction is ___________in amount of Cash and Cash Equivalents.
Option 1: Increase
Option 2: Decrease
Option 3: Both 1 and 2
Option 4: None of above
Correct Answer: Decrease
Solution : Answer = Decrease
Cash outflow arises when the net effect of a transaction is a decrease in the amount of cash and cash equivalents. This occurs when more cash is spent or disbursed than received, resulting in a reduction in the overall cash balance.
Hence, the correct option is 2.