Question

Which of the following transactions will result in 'Flow of Cash’?

(a) An issue of equity shares of Rs 1, 00,000.
(b) Purchase of machinery of  Rs 1,75,000.
(c) Redemption of 9% debentures Rs  3,50,000.
(d) Cash deposited into bank Rs 15,000.

Answer 1

Cash deposited into bank Rs 15,000.

The movement between the items of cash and cash equivalents does not result in cash flow. Such transactions belong to cash management of the business.