Question

Sultan Chand & Sons (P) Ltd. is a educational publisher. The company purchased a machinery of ₹ 4,00,000 for the use in packing of books. Purchase of machinery will affect ______.

विकल्प

• Cash Flow from Operating Activities

• Cash Flow from Investing Activities

• Cash Flow from Financing Activities

• None of these.

Answer 1

Sultan Chand & Sons (P) Ltd. is a educational publisher. The company purchased a machinery of ₹ 4,00,000 for the use in packing of books. Purchase of machinery will affect Cash Flow from Investing Activities.

Explanation:

For a non-financial company like a publisher, purchasing a long-term fixed asset (machinery) means investing in productive assets that will yield economic benefits over multiple years. Under accounting standards like AS 3/Ind AS 7, any cash spent on acquiring or disposing of long-term assets, such as property, plant, and equipment, is strictly classified as a cash outflow under Investing Activities.