Question

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

1. Cash deposited in the bank.
2. Proposed dividend.

Answer 1

Transaction	Cash Flow Type	Reason
(i) Cash deposited in the bank	No flow of cash	Cash and bank are parts of the movement within cash and cash equivalents.
(ii) Proposed dividend	No flow of cash	Cash is not affected because the proposed dividend is a contingent liability and will be paid next year.