Accountancy

SOLUTION There is no flow of cash because purchase of fixed asset on credit will not affect cash.

SOLUTION Outflow of Cash: Purchase of goods for Cash.No flow of Cash: Purchase of goods on Credit.

SOLUTION (i) Sale of goods for cash, (ii) Cash received from Trade Receivables.

SOLUTION Investing activities are related to purchase and sale of long-term assets whereas financing activities are related to activities that result in change in capital and borrowings of the enterprise.

SOLUTION Operating activities are related to purchase and sale of goods and services Whereas investing activities are related to purchase and sale of long- term assets.

SOLUTION Financing Activity.

SOLUTION Cash Flow Statement is historical in nature because it is prepared on the basis of Profit and Loss Account and Balance Sheet, which is based on past transactions.

SOLUTION Operating Activity.

SOLUTION Investing Activity.