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    Question

    In which situation flow of funds does not

    happen?
    A Current Asset to Current Liability Correct Answer Incorrect Answer
    B Current Asset to Non-current Assets Correct Answer Incorrect Answer
    C Non-Current Liability to Non-Current Asset Correct Answer Incorrect Answer
    D Current Liability to Current Asset Correct Answer Incorrect Answer

    Solution

    In accounting, the flow of funds typically occurs between items of the same nature. Current assets and non-current assets are different categories, so the flow of funds does not happen between them. The same principle applies to other options as well. For instance, the flow of funds happens between current assets and current liabilities (a), between non-current liabilities and non-current assets (c), and between current liabilities and current assets (d).

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