A company issued shares of ₹3,00,000 to the public. How it will be shown under the Cash Flow Statement?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Inflow of ₹3,00,000, under Financing Activity
Issuing shares raises capital from the owners, so it is a financing activity, and the cash received from the public is an inflow.
Why the other options are incorrect:
Option (1) Outflow of ₹3,00,000, under Financing Activity — Incorrect. The head is right, but the company receives the money; an outflow would be a buy-back or redemption.
Option (2) Outflow of ₹3,00,000, under Investing Activity — Incorrect. Investing activities concern long-term assets and investments, and the cash here comes in, not out.
Option (4) Inflow of ₹3,00,000, under Investing Activity — Incorrect. An investing inflow comes from selling assets or investments; money raised from shareholders belongs to financing.
NCERT (2026-27 edition): NCERT (2026-27 edition):
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