Study the following transactions I. Raising of short-term loans II. Goods purchased for cash III. Payment of bonus in the form of shares IV. Issue of shares in lieu of raw materials The flow of funds is

I, II, III and IV
II, III and IV
III and IV
Only IV

The correct answer is D. Only IV.

The flow of funds is the movement of money into and out of a business. It is important to track the flow of funds in order to ensure that the business is financially healthy.

In the given question, only option IV involves the movement of funds. When a company issues shares in lieu of raw materials, it is essentially exchanging shares for goods. This results in a flow of funds from the company to the supplier of the raw materials.

Options I, II, and III do not involve the movement of funds. When a company raises short-term loans, it does not necessarily mean that it will receive the funds immediately. The funds may be received in the future, and they may be used for a variety of purposes. When a company purchases goods for cash, it is essentially exchanging cash for goods. This does not result in a flow of funds. When a company pays a bonus in the form of shares, it is essentially exchanging shares for cash. This does not result in a flow of funds.

Therefore, the only option that involves the flow of funds is option IV.

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