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State with reason whether old furniture written off would lead to inflow, outflow or no flow of Cash and Cash Equivalents. - Accounts

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Answer in Brief

State with reason whether old furniture written off would lead to inflow, outflow or no flow of Cash and Cash Equivalents.

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Solution

Old furniture written off would not result in any kind of inflow, outflow or cash and cash equivalents.

The journal entry passed in this case would be:

Depreciation A/c         Dr.
   To Old Furniture A/c

This is mere entry to write off the old furniture in the books of accounts and does not denote any kind of inflow, an outflow of cash and cash equivalents.

Concept: Cash and Cash Equivalents
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