In a statement of cash flows, a company investing in short-term financing investments and in fixed assets results in ______________.

Increased cash

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Decreased cash

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Increased liability

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Increased equity

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B Decreased cash
Investing activities related to purchase and sale of long-term and short-term assets or fixed assets such as machinery, furniture, land and building etc.

Suggest Corrections

Similar questions

Q. Which of the following would not be considered a non-cash investing and financing activity in preparing a statement of cash flows?

Q. is the amount of investment done by a company in its long-term assets, also known as fixed assets.

Classify the following into (i) Operating Acivities, (ii) Investing Activities, (iii) Financing Activities and (iv) Cash Equivalents while preparing a Cash Flow Statement:
1. Cash Sales
2. Cash Received from Trade Receivables
3. Purchase of Building
4. Sale of Building
5. Issue of Share Capital or Debentures
6. Buy- back of Equity Shares
7. Dividend Paid
8. Interest paid on Debentures or Long - term Loans by (a) Finance Company (b) Non- Finance Company
9. Cash Purchases
10. Cash paid to trade payables
11. Redemption of Debentures and Preference Shares
12. Repayment of Long - term Loan
13. Office Expenses
14. Selling and Distribution Expenses
15. Manufacturing Expenses
16. Purchase of Goodwill
17. Sale of Patent
18. Purchase of Investments
19. Sale of Investments by (a) Finance Company (b) Non- Finance Company
20. Commission and Royalty received
21. Interest received on Investments by (a) Finance company (b) Non Finance company
22. Dividend received on Shares by (a) Finance Company (b) Non - Finance company
23. Rent Paid
24. Rent received if (a) Company's main business is property business (b) Other business
25. Income Tax Paid
26. Income Tax Refund received
27. Bank Balance
28. Short- term Deposits in Bank
29. Investment in Short - term or Marketable Securities

Following are the Balance Sheets of X Ltd. for two years. Prepare a Cash Flow statement:
$\begin{matrix} Particulars & Note & 31 - 03 - 2018 & 31 - 03 - 2017 No. (I) Equity and Liabilities: (1) Shareholder's Fund: (a) Share Capital & 3, 00, 000 & 2, 00, 000 (b) Reserve and surplus & 80, 000 & 30, 000 (2) Non- Current Liabilities: Long term Borrowings & 1 & - & 75, 000 (3) Current Liabilities: (a) Short term Borrowings & 2 & 25, 000 & 37, 000 (b) Trade Payables & 1, 50, 000 & 96, 000 (c) Short term (Provision for Tax) & 15, 000 - ------ - & 12, 000 - ------ - Total & 5, 70, 000 - -------- - & 4, 50, 000 - -------- - II. Assets: (1) Non - Current Assets: Fixed Assets & 3 & 3, 40, 000 & 3, 00, 000 (2) Current Assets (a) Current Investments (Short-term Investments) & 30, 000 & 20, 000 (b) Inventory & 90, 000 & 60, 000 (c) Trade Receivables & 97, 000 & 65, 000 (d) Cash and Cash Equivalents & 13, 000 - ------ - & 5, 000 - ---- - Total & 5, 70, 000 - -------- - & 4, 50, 000 - -------- - \end{matrix}$
Notes:
(1) $\begin{matrix} Long - term Borrowings: & 31 - 03 - 2018 & 31 - 03 - 2017 15 % Loan & - & 75, 000 (2) Short-term Borrowings: Bank Overdraft & 25, 000 - ------ - & 37, 000 - ------ - (3) Fixed Assets: Plant and Machinery & 4, 00, 000 & 3, 50, 000 (-) Accumulated Depreciation & 60, 000 - ------ - & 50, 000 - ------ - 3, 40, 000 - -------- - & 3, 00, 000 - -------- - \end{matrix}$
Additional Information:

(1) $\begin{matrix} 31 - 03 - 2018 & 31 - 03 - 2017 Rs. & Rs. Contingent Liability: Proposed Dividend & 30, 000 & 20, 000 \end{matrix}$
(2) Loan was repaid on 1st April, 2017

Q. Classify the Following Activities into cash Flows under (A) Operating (B) Investing (C) Financing:
(i) Cash Sales of Goods.
(ii) Income Tax paid.
(iii) Dividend Paid.
(iv) Purchase of Fixed Assets.
(v) Redemption of Debentures.
(vi) Royalty Received.
(vii) Cash paid to the Suppliers
(viii) Rental Income.

Join BYJU'S Learning Program

In a statement of cash flows, a company investing in short-term financing investments and in fixed assets results in ______________.

The correct option is B Decreased cashInvesting activities related to purchase and sale of long-term and short-term assets or fixed assets such as machinery, furniture, land and building etc.

The correct option is B Decreased cash
Investing activities related to purchase and sale of long-term and short-term assets or fixed assets such as machinery, furniture, land and building etc.