Question

Mention with reason whether the following would result in inflow, outflow, or no flow of cash:

1. Issue of fully paid bonus shares.
2. Cash withdrawn from bank.

Answer 1

Transaction	Cash flow type	Reason
(i) Issue of fully paid bonus shares	No flow of cash	Bonus shares are issued from reserves; it is a capital restructuring with no cash involved.
(ii) Cash withdrawn from bank	No flow of cash	It is a movement within cash and cash equivalents. No net cash change.