Practicing Success
Which of the following is not a source of cash? |
Issue of shares Purchase of Machinery Sale of Asset None of the above |
Purchase of Machinery |
The correct answer is option 2- Purchase of Machinery. The purchase of machinery is not a source of cash; it represents an outflow of cash as the company spends money to acquire the machinery. "Issue of shares" and "Sale of Asset" are considered sources of cash. When a company issues shares, it receives cash from investors, and when it sells an asset, it generates cash from the sale. |