Question:
Which of the following transactions will not result in flow of cash?
Which of the following transactions will not result in flow of cash?
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Moving cash into the bank does not change total cash and cash equivalents.
Updated On: Oct 26, 2026
- Purchase of furniture through a cheque
- Payment of salaries
- Issue of shares
- Cash deposited in the bank
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The Correct Option is D
Solution and Explanation
Step 1: Understand the question:
We must find the transaction that does not cause any flow of cash. A cash flow means cash coming in or going out of cash and cash equivalents.
Step 2: Check each option:
(A) Purchase of furniture through a cheque: money leaves the bank account. This is an outflow, an investing activity.
(B) Payment of salaries: cash goes out to employees. This is an operating outflow.
(C) Issue of shares: cash comes in from shareholders. This is a financing inflow.
(D) Cash deposited in the bank: cash in hand falls and the bank balance rises by the same amount. Both are part of cash and cash equivalents, so there is no net flow.
Step 3: Pick the answer:
Only option (D) does not result in a flow of cash. The marking scheme gives (D).
Final Answer:
Cash deposited in the bank. Option (D).
We must find the transaction that does not cause any flow of cash. A cash flow means cash coming in or going out of cash and cash equivalents.
Step 2: Check each option:
(A) Purchase of furniture through a cheque: money leaves the bank account. This is an outflow, an investing activity.
(B) Payment of salaries: cash goes out to employees. This is an operating outflow.
(C) Issue of shares: cash comes in from shareholders. This is a financing inflow.
(D) Cash deposited in the bank: cash in hand falls and the bank balance rises by the same amount. Both are part of cash and cash equivalents, so there is no net flow.
Step 3: Pick the answer:
Only option (D) does not result in a flow of cash. The marking scheme gives (D).
Final Answer:
Cash deposited in the bank. Option (D).
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