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Question
Acquisition of machinery by issue of equity shares of ₹ 30,00,000 will result in ______.
Options
Cash inflow from Investing Activities ₹ 30,00,000.
Cash outflow from Investing Activities ₹ 30,00,000.
Cash outflow from Financing Activities ₹ 30,00,000.
No flow of cash.
MCQ
Fill in the Blanks
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Solution
No flow of cash.
Explanation:
Acquiring machinery directly by issuing equity shares is a non-cash transaction. No actual cash or bank balance enters or leaves the enterprise during this exchange. Because a cash flow statement exclusively records events that involve physical inflows or outflows of cash and cash equivalents, this transaction has no effect on the statement, though it is reported separately in the notes.
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