Question:
Which of the following transactions will result in a flow of cash?
Which of the following transactions will result in a flow of cash?
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A transaction results in a flow of cash only when there is an actual movement of cash into or out of the business.
Updated On: Jan 13, 2026
- Cash withdrawn from bank rupee 71,000
Issue of 9% debentures of rupee 1,00,000 to the vendors of machinery
- Received from debtors rupee 74,000
Redeemed 10% debentures by converting into equity shares
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The Correct Option is C
Solution and Explanation
Cash withdrawn from the bank does not result in a flow of cash since it is an internal transfer.
Issue of debentures to vendors of machinery is a non-cash transaction.
Receipt of cash from debtors results in a cash inflow and is thus a flow of cash.
Redemption of debentures by converting them into equity shares is also a non-cash transaction.
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