Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Identify the cash transaction from the following:

Options:

Purchase of machinery by issue of preference shares

Redemption of Debentures by issuing equity shares

Issue of Debentures as collateral security

Purchase of land by taking loan

Correct Answer:

Purchase of land by taking loan

Explanation:

Purchase of land by taking loan- Loan is taken from the financial institution due to which bank balance arise to the business from which it purchases land. So it a cash transaction.