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mediumMCQCUET Accountancy 2023 28 May Shift 12026Accountancy
3 attempts0% success rate1 mark

Identify the transaction from the options below that involves an actual inflow or outflow of cash/cash equivalents:

  1. A
    Purchase of machinery by issue of preference shares
  2. B
    Redemption of Debentures by issuing equity shares
  3. C
    Issue of Debentures as collateral security
  4. D
    Purchase of land by taking a loan

Solution & Step-by-step Explanation

Analysis of options:Options (A) and (B) are non-cash transaction equity conversions.Option (C) involves keeping debentures as a secondary security without any immediate cash movement.Option (D): Taking a loan provides immediate liquid funds to settle the purchase transaction value of land, altering cash flow status through external borrowing facilities (Financing/Investing impact).

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Try it yourself before checking the explanation above.

Identify the transaction from the options below that involves an actual inflow or outflow of cash/cash equivalents:
A
Purchase of machinery by issue of preference shares
B
Redemption of Debentures by issuing equity shares
C
Issue of Debentures as collateral security
D
Purchase of land by taking a loan

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Financial StatementsCash FlowOperational Identification

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