Calculate the resulting cash flow and state the nature of cash flow from the following information:Acquired machinery for by issuing a cheque.
- AInvesting activity and outflow
- BInvesting activity and inflow
- CInvesting activity and no flow
- DOperating activity and outflow
Solution & Step-by-step Explanation
Buying machinery by issuing a cheque results in a direct reduction in the bank balance, which constitutes an immediate cash outflow. Since machinery is a long-term productive asset, this transaction is classified as an Investing activity with an outflow of .