Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:
What will be the net effect of the transaction 'sale of long-term investments for cash" while preparing a cash flow statement by a company?
Options:
Cash inflow
Cash outflow
No effect
None of these
Correct Answer:
Cash inflow
Explanation:
Selling long-term investments generates cash inflow as the company receives cash from the sale of these investments. This cash inflow is reflected in the cash flow statement, under the "Cash Flows from Investing Activities" category.