Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:
What will be the net effect of the transaction ' Discount received of ₹5000 while making a payment of ₹50000 to a creditor' while making the cash flow statement?
Options:
Cash inflow
Cash outflow
No effect
None of these
Correct Answer:
Cash outflow
Explanation:
Payment of creditor is done by the company for ₹45000 after receiving a discount of ₹5000. So, it is a cash outflow.