Question
Accountancy Question on Statement of Changes in Financial Position
Calculate the resulting cash flow and state the nature of cash flow from the following information:,
Acquired machinery for ₹3,50,000 by issuing cheque.
A
Investing activity and outflow ₹3,50,000
B
Investing activity and inflow ₹3,50,000
C
Investing activity and no flow
D
Operating activity and outflow ₹3,50,000
Answer
Investing activity and outflow ₹3,50,000
Explanation
Solution
Acquiring machinery is considered an investing activity and results in a cash outflow of ₹3,50,000.
Hence, the correct answer is Option 1.