Advertisements
Advertisements
Question
What will be the effect of ‘Purchase of Marketable Securities for Cash’ on Cash Flow Statement?
Options
No effect
Inflow from Financing Activities
Outflow from Investing Activities
Outflow from Financing Activities
MCQ
Advertisements
Solution
No effect
Explanation:
Marketable securities are part of Cash and Cash Equivalents. Purchasing them with cash is just a movement of money within the same category, meaning cash is exchanged for another form of cash. Since no money enters or leaves the company externally, the transaction has no net effect on the overall cash flow.
shaalaa.com
Is there an error in this question or solution?
