Question

State with reason whether the following would result in inflow, outflow or no flow of cash :

(i) Charging depreciation on furniture. 

(ii) Cash withdrawn for bank for office use.

Answer 1

(i) It would not result in any flow of cash as it is a non-cash transaction or item. 

(ii) It would not result in any flow of cash as it is the movement between two items of cash and cash equivalents itself.