What will be the net effect of the transaction 'cash received from trade receivables ₹20,000, and discount allowed ₹2000' while making a cash flow statement?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Cash inflow of ₹20,000.
Cash received by the company is a cash inflow.
Cash received from trade receivables ₹20,000.
Discount allowed ₹2,000.It has no affect on the cash inflow as exact cash inflow is mentioned. So, it will be the inflow of cash of 20,000.