What are Cash Flows?

‘Cash Flows’ signifies the flow of cash in and out because of any non-cash things. Receipt of cash from a non-cash item is known as cash inflow while cash payment with respect to such items as cash outflow. For example, the purchase of machinery by financing cash is cash outflow while sale profits earned from the sale of machinery is cash inflow. Other instances of cash flows involve the combination of cash from trade receivables, payment to employees, payment to trade payables, interest payments, receipt of the dividend, etc.,

Also Read: What is the purpose of a Cash Flow Statement?

The above mentioned is the concept, that is elucidated in detail about the Cash Flows for the class 12 Commerce students. To know more, stay tuned to BYJU’S.