Question : Which of the following transactions will result into inflow of cash?
Option 1: issued Rs.20,000, 9% Debentures to the vendor of machinery
Option 2: Deposited cheques of Rs.10,000 into bank
Option 3: Cash withdrawn from bank Rs.20,000.
Option 4: Received Rs.19,000 from debtors
Correct Answer: Received Rs.19,000 from debtors
Solution : The transaction that caused a cash flow was the receipt of Rs.19,000 in cash from the debtors.
Cash management activities such as depositing a check into the bank and withdrawing money from the bank do not include cash flow. A debenture issue is one that does not include cash flow and is issued for consideration other than cash.
Hence the correct answer is option 4.
Question :
Option 1: Deposited Rs.10,000 into bank
Option 2: Withdrew cash from bank Rs.14,500
Option 3: Sale of machinery of the book value of Rs.74,000 at a loss of Rs.9,000
Option 4: Converted Rs.2,00,000, 9% debentures into equity shares
Question : Which of the following transactions will not result into flow of cash?
Option 1: issue of equity shares of Rs. 4,00,000.
Option 2: Purchase of Furniture of Rs. 3,50,000
Option 3: Redemption of 9% Debentures of Rs. 7,00,000.
Option 4: Cash deposited into bank Rs. 30,000
Question : Cash received from debtors Rs. 10,000; 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
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