Home » mcq » accounting » Funds will be considered inflow in the followiong situation if
Payment of cash to creditors
Cash received from debtors
Cash machine was purchased
All of the above
Answer is Wrong!
Answer is Right!
The
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correct answer is:
B. Cash received from debtors.
A cash inflow is an increase in cash and cash equivalents. Cash equivalents are short-term, highly liquid investments that are readily convertible to cash.
Cash received from debtors is a cash inflow because it represents money that is owed to the company and has now been collected. This is a positive event for the company because it increases its cash balance.
Payment of cash to creditors is a cash outflow because it represents money that the company owes to its suppliers and has now been paid. This is a negative event for the company because it decreases its cash balance.
Cash machine was purchased is a cash outflow because it represents money that the company has spent on a new asset. This is a negative event for the company because it decreases its cash balance.
Therefore, the only option that represents a cash inflow is B. Cash received from debtors.